Art world dreading declines at upcoming key NY sales
By Christopher Michaud
NEW YORK (Reuters) - After years of meteoric rises, the global financial crisis is dampening the market for fine art and experts are hoping that's all it does during two weeks of major auctions in New York starting on Monday.
After London sales failed to live up to expectations earlier this month, experts are eyeing New York impressionist, modern and contemporary art sales at Sotheby's and Christie's auction houses to see how far the art market might follow the downward path of stocks, oil and property values.
And while auctioneers say they are cautiously optimistic, sellers in New York are being urged to rein in reserve prices, Sotheby's is cutting price guarantees and a major Picasso painting was withdrawn from sale at the last minute.
"There's no question there's a fair amount of uncertainty and fear worldwide, which makes a significant number of people cautious about using money for art," said Sotheby's Chief Executive Bill Ruprecht. "But hard assets such as art have a long history of holding their value."
More than $1 billion worth of fine art is set to go under the hammer in New York, including Francis Bacon's "Study for Self-Portrait" that Christie's expects to sell for some $40 million and Kazimir Malevich's "Suprematist Composition" that Sotheby's says could fetch up to $60 million.
"Frankly, I don't think there's going to be a collapse," said Baird Ryan, managing director of Art Capital Group, an art-related financial services firm.
But he expected "repricing in the fine art market, as there has been in every other one," adding that "everything's seen radical price dislocations in recent weeks."
"The auction houses have broadened the market, pulling in buyers from around the world and expanding interest in existing markets better than they ever have. But their massive overhead and infrastructure is leaving them vulnerable. It's a tricky balance," Ryan said. Continued...