BUSINESS

A Japanese coup

A record-shattering week for rare masterpieces

JOHN DALY May 28 1990
BUSINESS

A Japanese coup

A record-shattering week for rare masterpieces

JOHN DALY May 28 1990

A Japanese coup

BUSINESS

A record-shattering week for rare masterpieces

Unable to contain theirexcitement,many of the 2,000 onlookers shouted and left their seats when the winner was declared. The setting was not a sporting arena, but the elegant Park Avenue showrooms of Christie’s auction house in New York City. The victor was a soberly dressed Tokyo art dealer, Hideto Kobayashi, who last week bought Vincent van Gogh’s haunting Portrait of Dr. Gachet for a record $95.7 million on behalf of Ryouei Saito, a 74-year-old pulp-and-paper magnate. It took less than half an hour for Kobayashi, who bid by calmly tipping the gold nib of his fountain pen towards the auctioneer, to shatter the 1987 record of $71.5 million set by van Gogh’s Irises. Two nights later, at Sotheby’s New York auction house just a few blocks away, Saito, through a telephone bidder, almost topped his own record when he outbid a single challenger for another 19th-century Impressionist masterwork, Pierre-Auguste Renoir’s Au Moulin de la Galette for $90.6 million. But, amid last week’s euphoria, many dealers cautioned that, while the prices of rare masterpieces will likely continue to soar, prices of lesser paintings are softening. Said New York art dealer Allan Stone: “It’s an incredibly distorted situation.”

Despite the records, there were clear signals at the auctions that some segments of the art market are weakening. At the Christie’s

auction, paintings by 20thcentury masters Piet Mondrian and Henri Matisse, and one by Impressionist Edouard Manet, were among several that sold well below pre-auction estimates. Moreover, 23 of the 81 works offered failed to sell.

At the Sotheby’s auction, even though the Renoir fetched almost double the presale estimate of $46.4 million to $58 million and eight other individual artists’ records were set, total receipts for the 70 paintings offered were $331.8 million, only $2.3 million above the amount expected prior to the sale. The previous week, Sotheby’s shares plunged on the New York Stock Exchange by 16 per cent the day after an auction at which it withdrew several paintings and others brought prices well below their estimates.

Dealers say that the slowdown is partially the result of a general economic downturn. As well, New York dealer Ivan Karp says that Japanese collectors who once fuelled the explosion in prices by “buying with incredible ignorance and incredible amounts of money” are now becoming more discerning in their purchases.

But, while they are buying less, the Japanese still seem willing to pay any price to obtain

what they want. Following his triumphs last week, Saito said in an interview on Japanese television that he had authorized his representatives to bid up to $116 million each for Dr. Gachet and Au Moulin de la Galette. Declared Saito: “Once you like something, go all the way.” Saito added that he borrowed the money for the two paintings and that he plans to display them publicly in a gallery in the city of Shizouka in central Japan.

Saito’s resolve reflects the general attitude of the Japanese buyers who have led the art boom over the past decade. As recently as 1987, the highest price ever paid for a picture at auction was $13.6

million, for Manet’s Rue Mos-

nier with Street Pavers, a

record that had held since

1983. But, in 1987, Tokyo’s

Yasuda Fire and Marine In-

surance Co. more than tripled that record by paying $52.9 million for one 0f van Gogh’s

Sunflowers. Since then, six of

the 10 highest auction prices in history have been paid by Japanese buyers.

Those previously unimagined prices have led New York and London dealers to claim that the Japanese, and the speculative investors whom they have drawn into the art market behind them, have been buying recklessly, with no regard for artistic merit. Karp says that, as a result, “Japan has become a dumping ground for all the bad Manets and Renoirs and all the bad Postimpressionists.” Indeed, he said that the Japanese have driven up the prices of faddish modernist works by artists such as Andy Warhol and David Hockney to “grotesque levels.” Still, Karp added that he was encouraged by last week’s auctions, where less important works faced a cool reception. Said Karp: “Maybe they’ve been reading some of the press about their ignorance.”

Other upward pressures on auction prices are also relaxing. In January, Sotheby’s announced that it would no longer allow buyers to use the paintings they purchase as collateral for loans from the auction house. Art dealers criticized Sotheby’s for helping to inflate prices by lending Australian investor Alan Bond, now in financial difficulty, half the purchase price for Irises.

Even if prices continue to moderate, the spectacular rise over the past decade has driven all but the wealthiest museums and individuals out of the auction market. The National Gallery in Ottawa, for one, has an annual acquisitions budget of $3 million. Says Brydon

Smith, the gallery’s assistant director of collections and research: “We’re all spectators in the stands,” except for the richly endowed J. Paul Getty Museum in Malibu, Calif. As a result, museums are now more than ever dependent on the generosity of collectors.

Canadian museums and galleries have an advantage over American institutions because of the more generous treatment of art donations under Canadian tax laws. Ottawa allows donors of certified cultural property to deduct

the full appraised market value of any artworks from their net income. In the United States, private donors are only permitted to deduct what they originally paid for an artwork.

As well, in Canada, the art market has been largely immune to the frenzy that has swept through international markets in recent years. Geoffrey Joyner, president of Joyner Fine Art Inc., a Toronto-based auction house, said that while some Canadian paintings still sell at prices that are unchanged from five years ago, most have appreciated steadily. As well, works by some artists with international reputations, such as Group of Seven members and Quebecborn, Paris-based abstract painter Jean-Paul Riopelle, 66, have soared dramatically in value. Last week, at one of its biannual auctions in Toronto, Joyner sold a 1953 Riopelle abstract, Composition, for $418,000 to an undisclosed buyer. As well, Toronto dealer Emerich Kaspar, 53, purchased Group of Seven member Frederick Varley’s Bridge over Lynn for $363,000, more than double the presale estimate of $150,000 to $175,000.

Dealers and auctioneers claim that they prefer the stability of a market dominated by art lovers rather than a small number of wealthy speculators. But after he bought Dr. Gachet, Saito said that he was “extremely pleased by the purchase.” Whether they are art lovers or speculators, wealthy buyers have clearly left their mark on the art world.

JOHN DALY

LARRY BLACK