Christie’s: ‘Arabs are the New Russians’

Last week’s October art auctions in London were not just a dissappointment, they were the sharp sound of the art market bubble popping. Frieze Art Fair – the expo of contemporary art – has placed London at the centre of the art world for October sales, yet the buzz seemed to have gone right out of the market (as the WSJ reported last week):

Overall, Sotheby’s and Christie’s evening sales of contemporary art brought in a combined £54 million ($93.4 million), well below their combined presale estimate of between £88.4 million and £118.3 million. The result was down 19% from similar sales last October. Boutique auction house Phillips de Pury brought in £5 million, less than a third of its expected total and representing only 25% of its sale’s potential value.

“People are just being so cautious,” says Roberto Annicchiarico, a Milan-based dealer. “Before, collectors had to take whatever art they could get from dealers and auction houses, but now those collectors are saying, ‘Kneel down and ask nicely.’ ”

It’s emerging on Bloomberg that Sothebey’s have admitted to losing $15 million in their October sale (to get major art works in their sales, they often provide high price guarantees to owners). It would seem a lot of this might have to do with the Russian’s (who Larry Gagosian recently said accounted for almost half his sales) being busy with other things like protecting their aluminium empires from debtor vultures and watching their country’s stock market implode. The WSJ reported that the number of lots bought by American’s rose to 40% (up from 19% last year). With the state of the US economy, that can only be because the Russian’s haven’t bothered to show up. As Sarah Thornton wrote recently in the New Statesman: “rumour has it that the Russians have not bought any significant contemporary work since Damien Hirst’s £111m “Beautiful Inside My Head Forever” sale at Sotheby’s last month.”

So what’s left for this art market season then? What ray of hope? Well, it’s all about the Gulf now. Christies have been exhibiting $350 million worth of art in a hotel in Abu Dhabi over the last few days, preparing for a mega sale in Dubai on October 30th. Christie’s European director Jussi Pylkkanen is staying incredibly upbeat about how all the oil rich Arabs are basically going to bail him out, as reported in Bloomberg:

The size of the Abu Dhabi exhibition “gives you some idea of the growth and our belief that it will be consistently maintained over the next period,” said  chairman of Christie’s Europe, in a telephone interview. “ There’s no other way we’d be bringing $350 million worth of art to the Middle East.”

Right…. hmmm.

Will it work? Well, the Gulf seems to be puffed with pride at the moment – Bahrain is floating a massive IPO for, of all things, a housing and construction company, and this guy above (pictured) paid £7 million for a number plate reading ‘1′ in Abu Dhabi earlier this year. So if there are still any pockets of nouveau riche imbeciles living in a commodities-economy fantasy bubble and looking to outbid each other on art trinkets for the sake of something to do in between their brunch and lunch time orgies, I suppose Abu Dhabi is probably one of them.

Also, this bubble bursting basically reaffirms Damien Hirst as a genius/lucky s.o.b. for hocking his truckload full of pickled sheep and ’sub Bridget Riley’ dot paintings, for a whopping £111.5 million in September… pre POP.

Posted by Jonty Rhodes in Creative Economy | October 28, 2008 11:35AM |