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The art of beating the economic crisis

The art of beating the economic crisis
By Euronews
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The global art market is worth 43 billion euros annually, according to the European Fine Art Foundation’s latest report.

Europe’s share of the market is 36 percent, followed by the US and China, with the emerging countries showing strong growth in recent years.

How is the market reacting to the international economic crisis, who are the new players, how are tax laws affecting sales?

Euronews asked these questions to Guillaume Cerutti, CEO of the auctioneer Sotheby’s France and deputy CEO of Sotheby’s Europe, in this interview recorded at his Paris headquarters.

Giovanni Magi, euronews: “To what extent does the economic crisis affect the international art market?

Guillaume Cerutti: “The economic crisis is affecting the international art market, like all sectors, but in a relative or differentiated way, because the art market has special characteristics. This market is very surprising: it is a market where there are only individuals, individual collectors and individual objects. These are very special characteristics. And therefore faced with a crisis, we see that masterpieces, rare works with a prestigious provenance, large paintings, are not affected by the crisis. On the contrary, they are more sought-after by big collectors. In contrast, objects of lesser value, interesting paintings, but of less marked value, can be affected by the crisis and their estimates should at this point be extremely precise to enable us to sell them. So, the crisis has a differentiated impact depending on the quality and importance of the object.”

euronews: “There have been some auctions where works reach incredible prices. Is art always a good investment or there is the risk of a bubble effect, as in the stock market?”

Cerutti: “It is true that the major auctions have been breaking records. Last year, for example, Sotheby’s in New York sold a work of Eduard Munch, ‘The Scream’, a famous work, for more than $120 million. The works of Picasso sold at auction in Paris, for example a portrait of Dora Maar, went for seven million euros. It is true that these figures suggest that the art market is a somewhat protected area, a safe haven in times of crisis. The reality is more nuanced of course, because again there are areas where there are fewer buyers and worries about the global economic situation may be felt.”

euronews: “Is the art market increasingly reserved for the elites, the very rich?”

  • Cerutti:* “The art market is actually composed of several markets. If you take the great impressionist and modern paintings, the prices for masterpieces are often very high and to answer to your question, then it is, yes. To purchase an important painting by Picasso takes a lot of resources. At the same time, there are domains in the art market where you can make acquisitions at very low prices. For example, engravings: you can buy a work by Picasso, which is a true original, because it is one of very few copies engraved by an important engraver, for a few hundred euros. We had a sale in Paris at the end of February, of works from the engraver Crommelynck, where extraordinary works of Picasso sold for a few hundred euros.”

euronews: “What kind of artwork is the most prized by your clients?”

Cerutti: “The twentieth century art is undeniably the largest on the market today. Impressionism, modern art, the art of the postwar period, it is in these areas that the highest prices are made. Some other sectors have experienced in recent years a very rapid development, such as the arts of Africa and Oceania, which have become a very important sector of the market. Another area that has seen a dramatic development is Asian art. Only a dozen years ago, the art market was a market reserved primarily for Western clients: Europeans and Americans. In recent years Asian buyers, including the Chinese, came to the market with a huge appetite for buying works of their history, imperial works, seals, jades and ceramics, and we have seen this market also develop very quickly.”

euronews: “Who are your customers? Is their profiles changing?”

Cerutti: “The identity of the buyers, the profile of the buyers in the art market has evolved in recent years. A dozen years ago, the typical profile of the collector was a western one, a European, an American. Today, the typical profile is difficult to say, because there are buyers from Russia, China, India, and Latin America who have increased the number of potential customers, on top of the Americans and Europeans who are still there. So the profile is more difficult to draw. In addition, secondary sectors have highly developed in recent years. Take for example photography, or the art of Africa and Oceania which have experienced a very rapid development. They have led to an influx of new buyers, younger, a little different from what we had in the more traditional sectors ten years ago.”

euronews “Is Paris still attractive to collectors?”

Cerutti: “Paris and France were, 40 years ago, the main art market in the world. It was a time when France and Paris were still, from the point of view of creativity and the density of artists, a must. And then there were extremely important auction houses and dealers that dominated the world at a time when the art market was still relatively small. It was a coexistence of national markets. And throughout the 70s, 80s, 90s, and since 2000, the market became international. France has lost ground, because in this country we often like to have a little protectionist reflex. France has always been a little hesitant about globalisation. And we lost ground. As the process of globalisation grew, France lost its top spot. The action moved to countries and sales places that are more dynamic to attract buyers and create large events around sales: London, New York obviously, as well as now Hong Kong, which has become an extremely important sales point.”

euronews: “Is the art market sensitive to different countries’ taxation?”

Cerutti: “The art market is highly sensitive to taxation and regulations. For a very simple reason: objects that are sold on the art market, as well the collectors involved in the art market, are highly mobile. An object can be sold in Paris, but its owner can also decide to sell it very easily in London or Geneva. A collector can choose to buy at an auction in Paris but can also easily buy in London, Geneva, or New York today, with international technology, the Internet, sending catalogues, communications made by auction houses, which provide information at home anywhere in the world. So the taxation, from this point of view, is decisive, because it may cause a displacement of these actors or their preferences to sell a work of art.”

euronews: “What are your predictions for 2013 and the coming years?”


Cerutti: “What we observed in recent years is that after a period of very rapid development in the 2000s, we had, like other sectors, a crisis in 2008-2009, a crisis that was mainly a crisis of confidence and so the market shrank. We rebounded strongly, we developed well in 2010-2011 and 2011 was a very good year for the market activity of art; 2012 was a little down compared to 2011; and 2013 is a year we are watching carefully because I think there are risk factors: we must be cautious in estimating the items that are on sale, because the horizon of all the economic operators, but also our customers, is under scrutiny: people are not making long-term plans, they see that this year is undeniably difficult at a European level for growth and so they are cautious. Our role in this context is to adapt ourselves by making extremely attractive estimations to generate trust and then be extremely selective in the quality of sales that we set up at Sotheby’s, which is one of our main objectives.”

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