How the Fine Art Market Operates



owl-pussycat

Edward Lear’s The Owl and The Pussycat illustration

By Vyvyan Myerson

 

Most of us are unaware how marketing plays an important role in the Art Market. Artists generally are not marketers, using their skills to create and produce works, rather than selling. To establish a name in the art world is no easy task.

Few artists ever reach the pinnacle of fame in their lifetime. However, if an artist is fortunate enough to exhibit his or her work at an established art gallery, or is able rely on partners or supporters for promotion, there is a chance of acquiring fame and fortune. To become well-known usually requires time or money for exposure, and to achieve a name in the market place.

The majority of artists never exhibit their works, and paint purely as a hobby. Exposure is the name of the game as shown by artists like Vladimir Tretchikoff (1913-2006) who obtained an international reputation producing prints, increasing the value of his original paintings.

 

The Four I’s

Having worked for over half a century in this field, I believe that to achieve greatness, the artist has to be gifted initially with four I’s:

Inspiration

Imagination

Interpretation

Innovation

 

Art as an Investment

Art as a commodity should be seen primarily as appealing to the eye rather than as an investment that may materialize in the future. The art market, like fashion, is fickle and can be manipulated; it is the astute marketer who sees potential in the artists’ work to hone in on potential buyers. When working in London as a youngster in the early sixties I learnt one of the ways in which the art market was manipulated.

The gallery that employed me at that time was an avant-garde art gallery in the West End. The proprietors of the gallery advertised in the national and provincial newspapers over a period of months, that they were willing to pay £1 to £5 for water-colours, drawings and pencil sketches by Edward Lear (1812-1888), dependant on the quality, media, subject matter and size.

Edward Lear was an Englishman who, besides being credited inventing the Limerick, was an exceptionally fine 19th century artist, particularly of topographical subjects. He had travelled through Greece, Italy, Egypt, India and Ceylon and was prolific – drawing lakes, mountains, towns and pyramids, sometimes seen with figures in local costumes.

After about a year of advertising, my employers managed to purchase over three hundred works by Lear. The next step was to put one or two of his drawings up for sale at a time, at the two foremost London auction houses. The arrangement was to place them on auction, then buy back the works, paying the commission for the drawings they purchased. Their intention was to create a demand. At each consecutive auction they and their agents would increase the bid. This would generate interest in the prevailing market, which would note the increasingly high prices obtained for Lear’s work. At the same time, they continued advertising to buy Lear’s drawings.

After three or four years, the demand for Lear’s work reached hundreds of pounds; and in the case of his more detailed coloured drawings, thousands of pounds. By this stage the gallery began slowly to sell off its stock, making a considerable profit.

While there are many commodities in the market place, where supply and demand are manipulated to keep and increase values, this is but one way to create sales for an artist.

 

Estimation of Value

As a valuer, I am regularly requested to assign values to items by private and corporate collectors, as well as by museums and auctioneers. Prior to the computer age, auction house bidders were given the opportunity to bid, without the auctioneer or auction house providing estimated prices.

The auctioneer would put the item up for sale and from the rostrum, ask potential buyers “What am I bid?“, in order to start the bidding, there being no hidden agenda. More recently, the auction house estimates the value of an item prior to the sale, by advertising them in their catalogues. Whilst the estimated selling price is influenced by the auction house’s values placed thereon, the low estimate is usually determined by the lowest price, or reserve, the seller will accept.

Most auction houses will sell the item for 10% lower than the lowest estimate, usually with the seller’s permission. The fact that they give estimates psychologically influences the final price. Values in the fine and decorative antique sales are based in the main on comparative sales of similar or identical items.

 

The Value of Marketing

To illustrate the importance of marketing, whether through exhibitions or media releases, below are random names of seven people who, over the centuries, gave tangible meaning to humanity and civilization. One is the odd man out.

How many have you heard of? Five out of seven gives a fair score.

August Paul Wassermann (1866-1923)

Harry Brearley (1871-1946)

Frank Wittle (1907-1996)

Benjamin Huntsman (1704-1776)

John Logie Baird (1888-1946)

Pablo Picasso (1881-1973)

Jonas Salk (1914-1995)

These few examples illustrate the importance of marketing and exposure to the media to make an individual or work known.

August Paul Wassermannn – Diagnosis of Syphilis.

Frank Wittle – Credited with developing the jet engine.

Harry Brearly – Credited with the invention of Stainless Steel. (Originally known as “Rust-nor-Stain”)

Benjamin Huntsman – Inventor of spring steel, a crucial component in mechanical clocks and watches.

John Logie Baird – Principal inventor of Television

Jonas Salk – Responsible for the vaccine preventing Polio Myelitis.

Pablo Picasso – Artist. This is the odd man out, having made the least contribution to human progress, but the best marketed.

While some may argue differently about who invented what first, these are the names credited by history.

In conclusion, a valuer should not be a dealer, since buying or selling creates a conflict of interests as well as calling into question the integrity of the valuer. For these reasons, I have never been a dealer, in order that I could remain unbiased and unprejudiced.

There’s a hole in my bucket



Copy of P1290667-s

Mahogany brass-bound 18th century dish buckets

Some forty-six odd years ago I attended a household auction sale in Sandhurst – a gracious suburb of Johannesburg. Most of the contents for sale, whether furniture, silver, carpets, paintings or ceramics, were of superior quality. They had been purchased with a discerning eye and more than likely by the owner in Europe.

From my experience of eight years travelling and working indirectly with museums in the United Kingdom, Holland and Scandinavia as part of my work, I had a fairly good idea what items were genuine and those which were copies or fakes. The auction attracted many potential buyers and the prices realized at that time were high.

Having recently returned home I had spent most of my hard earned earnings on restoring a house and so although would have loved to have purchased many of the items, was limited to just bidding on a few objects which I unfortunately missed buying except for a bucket.

One of the objects to come up was a Mahogany brass-bound 18th century dish bucket. These buckets were popular in the 18th and early 19th century in stately homes and particularly for large functions and banquets where quantities of plates had to be cleared rapidly. The auctioneer obviously had never seen or sold such an item and holding it up on the rostrum by its brass handle asked the audience for an offer.  After a few seconds someone offered R5 and then a second offer from the floor brought to R7 and so the bidding continued until it reached R25.

The auctioneer at this stage turned the bucket around to show its fine patina whilst given the usual auctioneering patter and suddenly noticed it had a slat missing. Quick off the mark the auctioneer eloquently mentioned although the bucket was imperfect, one could easy have a slat made. The bidding seemed to come to a halt after the audience seeing the bucket with a missing section, when an antique dealer I knew well offered R30.

I knew that it was a dish-bucket and the missing slat was not missing at all, but purposely made to allow dishes to be carried to and from a table – the bucket made it easier and more practical for the servant or butler who maybe serving twelve guests or more to carry on and off plates in a bucket rather than a tray.

I offered R35 and so the biding continued between the antique dealer and me as the other bidders were not interested in a bucket supposedly missing a slat. Eventually, I bid up to R56 and luckily managed to purchase the item. As individual items, dish-buckets like peat buckets do not fetch a great deal of money, the value lies in pairs which make them rarer and more desirable.

Many antique dealers and auctioneers in the sixties were ignorant as to what they sold and one could easier find bargains than to-day…

Two unusual finds



The Fire-Back

Found abandoned on a rubbish heap

Found abandoned on a rubbish heap

 

My policy has always been to never buy from a client any article I’ve previously valued. However, on rare occasions I have received gifts given to me by a client, heir or executor. Over my forty-six years of valuing, I recall only three occasions in which I’ve received an object as a gift by a client – two were unusual finds!

The first: whilst waiting for the client to arrive for our appointment, I decided to look at the garden spending a good ten minutes inspecting each flower-bed in the front garden, after which I decided to walk around to the rear of the house. There at some distance from an enclosed backyard, nearest the boundary fence, was a portion of ground used as a rubbish dump. The heap which rose a metre or more above the ground, consisted of a few cheap broken metal kitchen chairs and a melamine top table piled on one another, covered with a fair amount of garden refuse.

As I drew closer, I noticed – sticking out from beneath the pile – what looked like part of an old broken wooden picket fence, a section of black cast iron. Removing a few of the planks I was amazed to see a complete fire-back. The blackened cast iron back, besides showing the raised date 1697, has a central raised figure of Neptunus holding a trident astride two seahorses in an ornamental arched frame with a floriated and ring border. Part of the castings showed a fair amount of rusting – obviously from being left exposed to the elements for a considerable amount of time.

When the client eventually arrived, I excitedly told him about the fire-back amongst his refuse; I had thought he was unaware of the fact and it may have been removed by a thief at some stage from the house and due to its weight and size dumped. The client told me quite the opposite, he’d brought it from London two years earlier to install in the lounge fireplace. His wife objected to having an old cast iron fire-back in her contemporary furnished room, so he had it thrown onto the rubbish dump.

Before leaving the client told me that I was more than welcome to take it away as the rest of the dumped rubbish was to be removed shortly. I was thrilled, and with the help of the gardener managed (as it was very heavy) to extract it, and fit it into the boot of my car. What perplexed me was this: although monetarily worth no more than £100, why had the client not disposed of it to an antique dealer or put it up for auction?

The Copper Planter

Found half buried

Found half buried

The second incident I experienced in coming across an unusual item, was some years ago when requested to carry out a valuation for insurance purposes. Taking a half hour lunch break from sitting all morning – weighing and detailing a quantity of 18th century silver objects – I decided to get off my butt and take a breath of fresh air. I strolled into their expansive garden.

The clients were elderly and the garden which once must have been a parkland of manicured lawns and flower beds was sadly neglected. Meandering around, I came across a wooden pergola which although still structurally sound, had seen better days. At the base of the stairs, I was intrigued by a pair of large copper Verdi green patina coloured, archaic style, planters half buried in the ground. Looking closer, I noticed that both the narrow necked bulbous bodied vessels had handles in the form of winged hermaphrodites: young women complete with pronounced breasts and penises terminating on embossed busts of cupids. Although quiet exceptional, I knew they where copies of Roman vases, no doubt of mid 19th century manufacture.

Some three years later, I was contacted by the Executor of the elderly couple’s estate, requesting a valuation as the couple had passed on.  The Executor mentioned the house had recently been sold and the reason for my valuation now, was for estate, probate and division purposes.

Remembering the planters, I mentioned to the Executor that I’d seen the most unusual planters in the garden when last at the house and wondered if they were still out there in the garden. Surprisingly, the Executor told me there was nothing much left and if I found them I was more than welcome to take them.

After completing the valuation, walked outside to the pergola and looked around for the pots which appeared were no more there. Eventually, finding an old garden fork I prodded around the base of the stairs and sure enough, after removing a few forkfuls of dry clods, there under a layer of soil lay buried a pot! The other pot had disappeared, as no amount of prodding and searching could locate it.

I was most grateful to be given at least one unusual planter and still to this day enjoy seeing it on my deck filled with an evergreen flowering plant.

 

Hermaphrodite detail on handle

 

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