2 October 2004

Art Market Notebook, Spring 2004

Fierce competition heats up Aboriginal sector

Sotheby’s is moving to meet the challenge of competitors snapping at its heels in the lucrative and ever-growing market for fine Aboriginal art

It had to happen. After nearly a decade of stellar growth, Sotheby’s failed for the first time to set a new Australian turnover record for an Aboriginal art auction, at its 2004 sale in Melbourne on July 26. But it is a mark of NYSE-listed firm’s success in this collecting category that a sale that aggregates AUD$6.6 million* and sets 18 new individual artist auction records can be considered something less than successful.

At least there is a culprit to blame: the “million dollar painting” of Uluru by Rover Thomas, which, in passing in for just $675k, knocked a hole in the catalogue and cruelled the post-sale headlines for Sotheby’s aboriginal art specialist, Tim Klingender.

“If the blockbuster sells it gets us across the line,” Klingender told Australian Art Collector, referring to last year’s benchmark of $7.5m. “We had no $400k or $500k paintings and only four above $200k, so it was still an incredible sale considering we had about 100 less lots than last year. This is a healthy, sophisticated and maturing market.”

Klingender still has no regrets about setting the $1m upper estimate for the Rover, which was more than $200k above the artist’s current auction record, also that for any Aboriginal artist. “It probably scared off a few bidders. With hindsight if we’d set a very conservative estimate of say $300-500k we would have had ten bidders and probably would have ended up with a better result.” However, as a marketing gambit, the “million dollar painting” press releases attracted plenty of pre-sale “million dollar” newspaper headlines.

Back in 2001, when the National Gallery of Australia went to $786,625 to secure Thomas's All That Big Rain Coming From Top Side, saleroom watchers gasped that the top end of the market could run so far ahead of the pack. Were market forces really speaking, or where they being amplified through the megaphone of Sotheby’s slick marketing?

Klingender remains supremely confident that “ten years from now Thomas will be selling for $10m”, but he’s not the only auctioneer who sees dot paintings in his dreams – red dots that is. Sotheby’s position as market leader is under assault as rival houses, Lawson~Menzies, Christie’s, Bonham & Goodmans and Shapiro’s have all begun moves to enter the Aboriginal art sector.

At its first Aboriginal art sale on May 4, Lawson~Menzies sold $1,637,620 worth of art with a respectable clearance rate of 69% It set five artist records, including $94,750 for Limestone Hills, Texas, 1994 by Queenie McKenzie Nakamarra. Klingender was adamant that Lawson’s sale, run by his former Sotheby’s boss, Paul Sumner, was inferior to his blue chip offerings: “There’s not one work in that sale that we would have consigned.”

Under newly-appointed specialist Shaun Dennison, Christie’s is aping Sotheby’s international preview strategy, planning Paris and New York previews of selected works in its “Modern Aboriginal Art” planned for the spring.

With competition for works ruthless, Sotheby’s has been forced to change tack. “From next year,” said Klingender, “we’ll be putting together a shorter, sharper sale of around 200 lots sold over one night where everything is of the highest quality.” Which means say goodbye to 600-lot sales over two days.

In non-indigenous art, “Christoby’s” went head-to-head again in late August in Sydney but both houses saw only indifferent clearance rates, Christie's recording 48 per cent sold by lot, and 61 per cent by value in a sale worth $3.345 million with John Olsen's Landscape and Night Heron (c. 1982) topping the tree at $239,000. Sotheby's sold $4.93 million, 62 per cent by lot with Lloyd Rees’s Surge of the Sea fetching $447,000, a new artist record.

Deutscher~Menzies two-day Sydney June Fine Art Auction showed again the company’s wisdom in going it alone, avoiding the traditional May double header in Melbourne put on by Sotheby’s and Christie’s. A sale aggregate of $7.3m (inc. buyers premium and all GST) outperformed both international houses and setting new benchmarks for David Larwill ($83k), Howard Taylor ($71,250) and Julie Dowling ($24k). After it’s record breaking auction in March Rod Menzies’s Melbourne-based flagship has shifted more than $15.5m worth of art through its Sydney sale this year – a phenomenal performance.

Taylor’s is a breakthrough sale which should herald the emergence of many more works at auction for this revered abstract painter and sculptor who died in 2001. His previous saleroom record was $51k set in 2002 but beyond that only a handful of works have been offered, mainly in Taylor’s home state of Western Australia, selling for sums well under $5k.

Meanwhile, down in the trenches and away from multi-million dollar sales, James Badgery’s new venture, Badgery's Auctions & Appraisers, held its first auction in late June in the old RAN Drill Hall in Rushcutters Bay. The sale went ahead with mixed results, and despite a flurry of legal correspondence with competitor Bonhams & Goodman, which has its offices in nearby Double Bay. If the presence of Badgery’s fledgling operation, which sold just 97 of 276 lots for an aggregate of $306,000, poses problems for B&G, its displeasure must be considerable at Christie’s luxurious new Sydney headquarters, just up New South Head Road in the refurbished former Edgecliff Post Office.

Badgery was unconcerned by the poor clearance rate and was happy to score a few significant sales, most notably $73,395 for the Norman Lindsay water colour, Jewels For A Lady, and several significant aboriginal works in what Badgery’s hopes will initially be his bread-and-butter range: under $20k. Badgery, formerly the long-time managing director of Lawsons, has had a bumpy ride the last few years, surviving Rod Menzies’s acquisition of Lawsons in 2002 before leaving to join Jim Byrnes’s new entrepreneurial venture, Cromwell’s Auctioneers. He left Byrnes late last year and launched Badgery’s in March this year. “After having worked for Rod and Jim these last couple of years, I’m very much enjoying being my own boss again,” he said.

As we go to press the Australian art market is gearing up to once again coagulate, disseminate and sell, sell, sell at the 2004 edition of the Melbourne Art Fair, from 29 September to October 4. The international roll call will expand this year to include contemporary galleries from Beijing, Shanghai, Hong Kong, Seoul, Tokyo, Osaka, Auckland, Wellington, Amsterdam, Rome and New York and with sales last year totalling $6.3m, MAF can lay claim to be leading contemporary art fair in the Asia Pacific.

And in the context of the October 9 Federal Election, collectors who vote might want to appraise themselves of the issues on a proposed Resale Royalty Scheme for the Australian art market by reading the discussion paper released by the Howard Government.

Without taking a position, the paper outlines four options for proceeding:

  1. a fully legislated scheme,
  2. industry self-regulation,
  3. contract-based resale royalties, or
  4. no resale royalty scheme.
Apart from canvassing the issues, the paper also includes much interesting data comparing a “droit de suite” schemes throughout the world. Other nuggets of dispersed data include the Australian Bureau of Statistics estimate that total expenditure by households on paintings, carvings and sculptures in 1998–99 was $274 million. You can download the paper for free here.

* All quotes are in AUD. All prices quoted include the buyer's premium, and where applicable, GST.








First published in Australian Art Collector

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