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Changing art market influenced Christie’s Palm Beach closing

Posted On: 04-17-2016

By Jan Sjostrom

Daily News Arts Editor

Changes in the art business have made it unnecessary for Christie’s auction house to maintain an office in Palm Beach, industry professionals said.

The linkage between Palm Beach and New York and the rise of digital communications mean that Christie’s can service its clients easily from its New York office.

“We have some of the top private collectors in the world in Palm Beach, but they all go directly to people they deal with in New York,” said resident and art adviser Michel Witmer. Many Palm Beach collectors have homes in New York.

Christie’s closing follows Sotheby’s downsizing. Five years ago, Sotheby’s Palm Beach office employed five people, said independent art adviser David Ober, who led Sotheby’s Palm Beach office for 20 years. Today there’s one.

Years ago, on-site representatives scouted for pieces in Palm Beach, and collectors visited the office to look at catalogs and discuss possible sales. “That model seems to be gone,” art adviser David Miller said.

Now auction information is available online, and prospective sellers communicate with the big auction houses by email.

Christie’s announced earlier this month that it will close its offices in Palm Beach, Boston and Philadelphia.

“Moving forward, our New York team will make regular visits to these locations to cover clients,” a Christie’s spokeswoman said. The realignment will enable the company to increase its presence in the West Coast, Midwest and Southwest, the company said in a statement.

Recent sales reports suggest cost-cutting might be called for.

Christie’s reported a 5 percent decline in total sales in 2015, arresting a surge that started in 2010. Auction sales of postwar and contemporary work dropped 14 percent, indicating a cooling in speculation in younger artists. Many collectors retreated to safer modern and impressionist art, where sales rose by 57 percent but competition for increasingly scarce high-end work is fierce.

The global market saw its first contraction since 2011, as sales slipped 7 percent in 2015, according to The European Fine Art Foundation’s annual art market report. The only region that grew was the United States, but its 4 percent jump lagged behind the 10 percent growth of 2014.

Big money sales

Auction sales were disproportionately weighted toward works costing $10 million or more, which accounted for 28 percent of sales but just .1 percent of transactions.

“The emphasis is on big collectors and a single expensive painting,” Ober said. “We are all out there fighting for the same ones.”

In the past, the big auction houses accepted consignments from Palm Beach estates that included a lot of lesser material to get their hands on a multimillion painting, Witmer said. But now “all these are locked up in museums or private collections,” he said. “There’s no incentive to take in all that other stuff.”

That’s opened the door for companies such as Leslie Hindman Auctioneers, a Chicago-based firm that debuted four years ago in Palm Beach. “The bigger houses focus on multimillion works of art,” Leslie Hindman said. “That’s not what we do.” She’s expanding her West Palm Beach salesroom.

Election-year jitters and a temperamental stock and bond market probably contributed to Christie’s slumping sales, said Nick Korniloff, executive vice president and partner of Art Miami LLC. Competition from art fairs also is cutting into auction house business, Witmer said.

But “I don’t think Christie’s closing its office is an indication of the strength of the collector base in Palm Beach,” Korniloff said.

In fact, “we’ve notice a spike in younger collectors, like the hedge-fund families who have moved from the Northeast to live full-time in Palm Beach,” he said.

Younger collectors tend to hold on to their art longer to give it time to appreciate in value, which could be another reason for Christie’s retreat, he said.

Business is brisk at Sarah Gavlak’s contemporary art galleries in Palm Beach and Los Angeles. But she can understand why Christie’s is opening a new space in Beverly Hills and investing in the West Coast. “It’s a new market,” she said. “There’s a lot going on out here.”





Source: Jan Sjostrom, April 17, 2016, Palm Beach Daily News

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