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Art: Maximising the Value

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Anthony Verschoyle of Gurr Johns explains how to make the best value from your art collection.

At the present time press reports would suggest that the art market is booming. While certain areas are seeing significant price inflation, anyone with more than a cursory knowledge of the market will be already aware that it is made up of sub-markets, some robust, some stagnant. My concern here is how best to capitalise when selling, whether in a strong or weak sector.

For a successful sale, there are many factors that need to be considered. Firstly it is important to ascertain whether a particular auction house has a strong record of successful sales in the area that you are considering consigning. All auction houses will claim success, therefore you should obtain opinion from knowledgeable third parties.

Is the work being offered in the right geographical location? In theory an international auction house should help vendors make the correct choice, but there is a human tendency of possessiveness. Also while there are obvious risky choices, such as selling certain American paintings in Europe or most English pictures in the US, there are grey areas. For example the English sculptors Henry Moore and Barbara Hepworth have an international following, and in theory could be offered in any major art centre, however it is not surprising that the highest prices paid for both are seen in their country of origin.

Much is largely common sense. We recently advised a client who had offered unsuccessfully a School of Paris painting in New York. The painting depicted a well-known (in France) sitter. The picture was transferred to Paris, reoffered and sold for three times the unmet reserve in New York. Another crucial factor before consigning, is to ascertain the nature of other lots in the sale. It is generally a bad idea to offer a work, when there is a comparable and slightly more important example in the same sale. This is a question that has to be asked, as it is rarely volunteered.

Further there is the issue of presentation, which can range from the trivial (but crucial) such as the glazing on a picture. An important Old Master that had made a record price when previously sold, was recently re-offered without removing the thick glass that had been installed as protection for an Institutional loan. As such it presented badly and failed.

Generally paintings should not be cleaned prior to sale, however again there can be exceptions, such as when a work has been poorly restored in the past, and where later over paint is obscuring the original work. This could otherwise result in a work being miscatalogued and downgraded. Clearly specialist advice is needed here. Provenance i.e. history of past ownership is crucial. The more information the better, so any receipts, inheritance details, exhibition history, references in literature should be noted and included in the cataloguing.

Obviously catalogue photography is a vital factor in the success of an offering, as it is frequently all a bidder may see. The standard of auction house photographs is variable particularly when working to a deadline. It is important to ask to see the photograph before the catalogue goes to press. We recently found that a photograph had been significantly cropped, which unbalanced the composition; fortunately there was time to have it re-shot.

With regard to terms, auction houses charge on a sliding scale depending on the value of an item on collection. For substantial sales, there may be no vendor’s commission (just the buyer’s premium), or even a rebate to the vendor or part of the buyer’s premium. On occasion the level of rebate that can be negotiated may be considerable, if two auction houses are competing for a collection. As part of negotiation there are other factors that need to be discussed such as the nature of marketing, the degree to which an important item is promoted, should it for instance be on the front cover of the catalogue (probably not, as too hyped), inside the front cover (probably better), advertising, exhibitions abroad prior to offering. There may also need to be discussions about positioning in the saleroom itself and lighting of the object.

An alternative is private sale through a dealer, an agent or an auction house. Here issues again are complicated. If selling through a dealer there is a tendency for them to promote their own property more energetically than consigned items, while auction houses are generally better at conducting auctions rather than private sales. Here there is an inclination to offer works at too high a price level, and then after no sale has taken place to include it in an auction. At this point the work of art may well have been overexposed, so it then fails to sell in the auction, and now has the opprobrium of such failure permanently recorded on the internet, and as such may now be substantially devalued. Nevertheless, well-handled private sales can be extremely successful.

In conspicuous instances this can be seen in the market for impressionist pictures of secondary or tertiary quality which were boosted by the Japanese inflated boom after 1988. At the time it was difficult to believe that those prices were sustainable. Many such works were selling for less nearly 25 years ago.

To try and actively maintain or bolster value there are other crucial issues, such as diligence regarding conservation, whether in terms of attention to the object or improving its environment, particularly in unkind climates such as New York.

Lending to exhibitions is a bolstering factor, but only if it is a significant exhibition with a respected curator. Over energetic lending looks like an attempt to hype. Just as with auction catalogues, it is vital to see a loan catalogue entry before going to press.

As with a serious exhibition, new literature – for example a Catalogue raisonné – can have a substantial impact on the value of an artist’s works in a remarkably short timeframe. In the context of Modern British painting, new volumes on Ivon Hitchens and John Craxton are noteworthy instances; clearly you would not wish to sell prior to publication.

Adhering to the above should avoid many of the pitfalls that are frequently encountered in this market place.