Private Sales Surge at Christie's — Will the Auction House Crowd Out Dealers?
Christie's released its global sales numbers for the first six months of the year yesterday and, perhaps unsurprisingly, reported huge increases. The auction house, increasingly looking like the big-box store of the art market, reported that it sold £2.2 billion ($3.5 million) between January and June — a 13 percent bump over the same period last year and the best first-six months for any auction house. But it's not all being driven by $87 million Rothkos. A full 20 percent of that total, £413.4 million ($661.5 million), came from behind-the-scenes private sales, including those from the Christie's-owned Haunch of Venison gallery*. The figure represents a 53 percent jump from the first six months of 2011.
The rise in auction house private sales is nothing new, but seems to be really taking off in the last couple of years, as the houses devote more and more resources to it. Just last month in London auction-goers were shocked when the top-priced Renoir at Christie's Impressionist and modern art sale was withdrawn from the sale, having been sold privately before the auction began. The house reported that the work sold for a price between its £12-18 million pre-sale estimate.
Christie's CEO Steven Murphy has stated openly that he is focused on boosting the private part of the business, as well as increasing the company's Web presence (there was also a 15 percent increase in bidders coming from the online platform Christie's Live). But as sales decrease in Asia and the market below $1 million falters, big-ticket private sales are clearly the company's cash cow. It showed as much when it announced in May it was hiring former Gagosian director John Good and that post-war and contemporary art chairman Amy Cappellazzo would be taking a more active role in the realm of private sales.
What does this mean for the rest of the art market? It's a threat to secondary market dealers, for sure, as well as the rest of us that rely on public auction house data to gauge the state of the market. And what about Christie's big rival? Sotheby's has not yet released their first-half sales, but a Wall Street Journal article published Tuesday notes the house sold only $2.44 billion, down almost 16 percent from last year. Despite that, Sotheby's is also focused on selling privately, and opened its own gallery, S2, last year to rival Christie's Haunch. The competition for private sales is likely to continue heating up.
* UPDATE: Haunch of Venison operates independently from Christie's private sales, which are done directly through the auction house. However, the revenues of the two operations are tallied together for the reported "private sales" total.