Skate`s Market Notes

Transparency for the Global Art Market Since 2004 www.skatepress.com th
575 Broadway, 5 Floor, New York, NY 10012 USA /phone: +1.212.514.6010 /fax: +1.212.514.6037 Skate’s Market Notes March 19, 2010 Aggressive Prices Sought for Second Tier Léger in Paris Auction Undoubtedly one of the 20th century’s greatest artists from in terms of artistic contribution, Fernand Léger has also repeatedly proven to be one of the market’s most highly valued artists. Currently ranking sixteenth in Skate’s Top Artists -­‐ currently 183 artists are represented in Skate’s Top 1000 -­‐ Léger has seen nine works exceed $10 million in auction sales (including buyer’s premium). Save for one -­‐ Etude pour les constructeurs, fond bleu (1950) -­‐ all of these top sales were on works created during the peak of Léger’s development as a painter around the time of the First World War. With very few exceptions, Léger’s later works have been given far less interest by the market. Of the nineteen works by Léger in Skate’s Top 1000, only three were created after 1930. Twelve of them date prior to 1920. All of this leads us to ponder why PIASA, a leading French auction house, is so aggressive with its price estimate for tomorrow evening’s sale of Nature morte sur fond jaune (1939). If this work sells for the mid-­‐range estimate of just over $1.16 million, then it will be the third most valuable work to sell from its peer group of Léger still life paintings from 1930-­‐1939. Nature morte (Composition pour une salle à manger) (1930) and Nature morte (1930) each sold for $1,995,082 and $1,312,760, respectively. See the entire peer group in Exhibit 1 below. The average price of the works in this Léger peer group is $592,130 (including the repeat sale of Nature morte au citron), which makes even PIASA’s lower estimate seem overly aggressive. From an investment standpoint, further evidence of an overly aggressive estimate for Nature morte sur fond jaune can be seen in the one repeat sale from this peer group. On June 25, 2008, Nature morte au citron sold at Sotheby’s for $898,153. Almost one year later to the day, it sold for $749,436. Given the seller’s premium paid on the second sale in 2009, the annualized effective rate of return on the painting is a miserable -­‐31.77%. Even when we look at this sale in terms of the original transaction currency (pound sterling), the return achieved on the repeat sale was -­‐18.19% (the premium price in both 2008 and 2009 was exactly £457,250). Weak sales in the peer group provide yet another indication that Nature morte sur fond jaune, at PIASA’s estimate, is not the best investment. A full 25% of the peer group was “bought in” at Transparency for the Global Art Market Since 2004 www.skatepress.com th
575 Broadway, 5 Floor, New York, NY 10012 USA /phone: +1.212.514.6010 /fax: +1.212.514.6037 auction, which means that no buyers could be found -­‐ at least no buyers interested in paying whatever reserve price may have been assigned to those works. One work -­‐ Nature morte aux deux fruits -­‐ was brought to auction three times before it finally found a buyer at Christie’s in February 2010. The previous two attempts -­‐ at Loudmer Scp. in 1991 and Christie’s in 1999 -­‐ failed to find winning bidders. Admittedly, the repeat sale of Nature morte au citron did take place against the backdrop of the greatest financial crisis in several generations, and the short one-­‐year holding period does suggest that the 2009 sale may have been prompted by the seller’s need to liquidate assets quickly. Even still, 2009 saw remarkable strength in Impressionist and Modern art, including the major sale of Léger’s La tasse de thé on February 23, 2009 for just over $14.7 million. We can only conclude, therefore, that the investment attractiveness is low at PIASA suggested valuation range, which includes a considerable irrational premium. Exhibit 1 -­‐ Peer Group for Nature morte sur fond jaune Work Year of Auction Creati
on Nature morte (Composition 1930 pour une salle à manger) Estimate Estimate Premium Date of (low), (high), Price, Sale USD USD USD Christie's Jun 23, 1,975,50 2,634,00 1,995,08
2009 3 5 2 1930 Champin, Lombrail, Gautier Jun 21, 1,064,40 1,419,19 1,312,76
1990 0 0 0 Nature morte, fond bleu (à 1937 l'étoile) Christie's Nov 9, 1999 600,000 800,000 1938-­‐
Christie's 1939 Nov 3, 2004 900,000 1,200,00 1,015,50
0 0 1938 Champin, Lombrail, Gautier Nov 21, 643,086 1989 723,472 934,083 1938 Sotheby's Jun 25, 783,545 2008 1,175,31
898,153 8 NATURE MORTE 1930 Grande nature morte Nature morte Nature morte au citron 1,047,50
0 Transparency for the Global Art Market Since 2004 www.skatepress.com th
575 Broadway, 5 Floor, New York, NY 10012 USA /phone: +1.212.514.6010 /fax: +1.212.514.6037 Work Year of Auction Creati
on Nature morte aux fruits sur 1939 fond bleu Estimate Estimate Premium Date of (low), (high), Price, Sale USD USD USD Sotheby's May 6, 2004 700,000 900,000 814,400 1938 Sotheby's Jun 24, 604,396 2009 715,733 749,436 1938 Christie's May 7, 2008 500,000 700,000 601,000 1937 Christie's May 3, 2006 300,000 400,000 531,200 Nature morte aux deux fruits 1938 Christie's Feb 3, 2010 352,677 448,861 462,430 Composition avec vase (Nature morte avec vase) 1938 Sotheby's May 6, 2004 250,000 350,000 433,600 1937 Sotheby's Feb 6, 2001 176,730 220,913 318,899 1938 Christie's Feb 10, 225,563 2005 338,345 284,972 1938 Christie's Dec 3, 1996 200,870 267,827 204,268 1938 Sotheby's May 11, 140,000 1988 180,000 198,000 1931 Christie's Nov 12, 170,000 1992 200,000 165,000 1939 Christie's Nov 8, 1995 150,000 145,500 1938 Drouot-­‐
Estimations Dec 13, -­‐-­‐ 1991 -­‐-­‐ 145,089 Sotheby's Jun 29, 84,889 1994 92,606 122,858 Nature morte au citron Esquisse pour La nature morte aux trois feulles Nature morte au melon Nature morte Nature morte au citron Nature morte Nature morte à la pipe Nature morte Nature morte aux fruits NATURE MORTE AUX SIX FRUITS ESQUISSE POUR LA NATURE MORTE AUX TROIS 1938 FEUILLES 100,000 Transparency for the Global Art Market Since 2004 www.skatepress.com th
575 Broadway, 5 Floor, New York, NY 10012 USA /phone: +1.212.514.6010 /fax: +1.212.514.6037 Year of Auction Creati
on Estimate Estimate Premium Date of (low), (high), Price, Sale USD USD USD 1938 Sotheby's May 15, 50,000 1985 70,000 55,000 1937 Christie's May 11, 300,000 1989 350,000 Bought In 1931 Christie's Jun 25, 241,818 1991 322,424 Bought In 1932 Cornette de Saint-­‐Cyr Mar 13, 117,013 2000 131,640 Bought In NATURE MORTE AUX DEUX 1938 FRUITS Loudmer Scp. May 25, 204,743 1991 307,114 Bought In Nature morte aux deux fruits 1938 Christie's Dec 9, 1999 129,912 194,868 Bought In 1930 Sotheby's May 13, 400,000 1998 600,000 Bought In 1933 Christie's Jun 22, 548,446 2004 731,261 Bought In Work Nature morte tricolore Nature morte Nature morte Nature morte Nature morte Nature morte aux trois fruits jaunes Source: Skate’s Art Market Research, artnet N.B. Repeat sale indicated in lavender Exhibit 2 -­‐ Repeat Sale in Peer Group Nature morte au citron,
1938 Currency of Sale Dates Hammer Price GBP Premium Price ERR Jun. 24, 2009 380,000 457,250 (18.19%) Jun. 25, 2008 380,000 457,250 USD Jun. 24, 2009 622,823 749,436 (31.77%) Transparency for the Global Art Market Since 2004 www.skatepress.com th
575 Broadway, 5 Floor, New York, NY 10012 USA /phone: +1.212.514.6010 /fax: +1.212.514.6037 Jun. 25, 2008 746,415 898,153 Source: Skate’s Art Market Research (auction results from Sotheby’s)