Is the Old Master market dead?

July 17 2015

Image of Is the Old Master market dead?

Picture: Sotheby's

The London summer sales are traditionally seen as the most important week of the Old Master world, and an important indicator of the health of the market. This year, the overall sales total was down on previous years. Sotheby’s evening sale made £39.3m, which could only be described as ‘above estimate’ thanks to the inclusion of buyer’s premium in the final totals (catalogue estimates do not include premium). Christie’s sale was pretty disastrous. Already hit by the loss of the Beit collection pictures, their total was a sad £18.9m. 

In some quarters such patchy results have produced anxiety, and even gloom. Is the Old Master market dying, people ask? A leading art market journalist told me after the sales that, because hardly anyone wants to own old art these days, we are witnessing the ‘end of the market. End of story’. 

The latest publication of Artnews ‘Top 200 Collectors List’ stated another apparent decline in Old Master collecting - of the 200 collectors featured, only 10% were buying Old Masters, whereas in 1990 it was 15%. This theme was picked up in the wider press, as evidence of a ‘growing decline’ in the Old Master market. 

Finally, in a piece for the New York Times, Scott Reyburn cited the decline of independent dealers as further evidence of a wider collapse of the Old Master market, and quoted the dealer Edmondo di Robilant (who deals in both old and modern art, though the latter only more recently) “People don’t go to galleries any more, and they don’t buy old masters,” he said. “They’re not part of the overall mood of today’s taste.”

Well, bulls**t. Yes, the recent sale totals were not stellar, but that’s no reason to panic. There’s no reason to believe that Old Masters are falling through the floor. You might say I’m biased, and, being an Old Master dealer myself for over a decade, merely trying desperately to inflate the market. All I can say is, either I’m writing this because I’ve managed to make a fairly decent living out of selling Old Masters for the last ten years (and mostly to the ‘middle market’ everybody says doesn’t exist), or I’m a delusional fantasist. You decide.

Let’s look then at the various portents of doom. First, that Artnews ‘Top 200 Collectors list’. I’d like to know how reliable and scientific is the data. Who compiles it, who decides who is a top collector, and on whose figures? We are not told. I suspect the list is dominated by modern and contemporary buyers because they’re more likely to be public about the art they buy. For many collectors of contemporary art, it’s about the brand, the glitz, the big names, and buying the art is a way of buying into it by association. It’s conspicuous consumption. 

In my experience, those who buy Old Masters (and who may be just as rich as their contemporary-collecting peers) are rather discrete and introverted. You might say, well the point is it’s not seen as ‘cool’ to buy Old Masters - and you’d be right. But that’s not news - Old Masters haven’t been cool for decades, even centuries - so we can’t use that fact as evidence of a sudden decline on Old Master interest. And in any case, aren’t Impressionists still ‘cool’ - or rather ‘hot’? Not according to Artnews, who say there has been an even bigger decline in people buying impressionism and post-impressionism. In 1990 that sector accounted for 18% of sales; now it’s just 9% - less than Old Masters. This hardly tallies with the explosion in prices for works by Monet et al. In short, I think the Artnews collector’s list has more to do with marketing than data.

Then let’s look at the numbers for the recent London Old Master sales. Sotheby’s average evening sale total for the last 9 years is £41.05m, so they hardly disgraced themselves this time around with £39.3m. Add in the totals for Old Master drawings and sculptures (and why not, it’s an indicator of demand for ‘old art’), then the total Sotheby’s haul for the week was £52.03m - or, to put it in context, just over a third of Sotheby’s recent combined total for their summer contemporary and art evening and days sales. Is that really a sign of a dying market? 

Christie’s 9 year evening sale average is slightly less than Sotheby’s - £39.6m - and there’s no denying that this year’s sale for them was bad news, at £18.99m. (Their total for ‘old art’ sales in the week was £26.59m). I suspect the Beit pictures might have added some way over the combined lower estimate of £5.3m. But if we’re honest, the disappointing Christie’s sale total might have something more to do with the fact that Sotheby’s - in both London and New York - has ‘the big mo’ when it comes to securing big pictures.* 

Anyway, even if we concede that the overall auction totals last week were disappointing, this to me reflects no alarming decline in Old Master demand. Rather, it reflects the more obvious fact that the sales themselves were disappointing. There were no star lots by Titian, Rembrandt, or Rubens this time around. There was only one fully catalogued Van Dyck (in Christie’s day sale). There was no major Canaletto, and no Turner or Constable landscape. 

Instead, the stellar lots were a Bellotto of Dresden (at Christie’s, estimated at £6m-£8m), and a Cranach ‘Mouth of Truth’ (above, at Sotheby’s, estimated at £6m-£8m). The former, a nice enough picture, failed to sell, probably because it carried an estimate we might expect to see for a Venetian scene. The latter was certainly an important work, but could hardly be called a masterpiece - and yet it sold for £9.3m. That’s an astonishing price for Cranach, and a new record. And from what we’re told it sold to a Chinese buyer.

A Chinese collector of Old Masters, buying Cranachs for a record sum? That seems to me a sign of a market in rude health. Indeed, we’re also told that a Chinese collector bought a portrait by Ferdinand Bol for £5.2m. Think about that - a portrait by Bol (hardly an artist to set the world on fire) for £5m, going to China? For me, that more than makes up for the apparent lack of Russians (doubtless hit by various sanctions) buying second-rate Brueghels - which arguably has been an inflated market for some time now.

So, forgive me for being optimistic, but I still see signs that the Old Master market is actually in good health. And nor should one below par sale make us forget some of the other extraordinary prices that have been achieved in recent years - prices which, not so long ago, had commentators saying Old Masters were the new thing; a George Stubbs making over £20m, a small drawing by Raphael making $47.9m, a Turner making £30m, and so on. The number of Old Master artists who make big prices is far more diverse than the 20 or so who seem to dominate the modern and contemporary market.

And what are we to make of those other Old Master voices who are happy to feed the media narrative that the Old Master market is dying? Regular readers will know that I take a dim view of dealers who say things like ‘nobody buys Old Masters anymore’. Often, they’re just looking for excuses for failure. It’s much easier to blame a change in taste for the fact that you can’t sell pictures any more. 

Here, the wider story is the fact that the Old Master market is (and has been for the best part of a decade) undergoing a profound change in the way it operates. Those dealers who moan about a lack of good pictures to buy or clients to sell to tend, in my experience, to be those who have been around a bit - those who used to be good at the traditional retail model of art dealing. In the old days, you could get away with buying fully catalogued pictures at auction, and then asking a hefty margin in either your swanky London gallery, or at a fair like Maastricht. You needed a bit of flair, the right accent, and a nice showroom. 

But now it’s almost impossible to do that anymore. First, the transformation of London property prices, with international fashion brands prepared to pay through the nose for loss-leading premises in central London, has forced dealers either to vacate the traditional areas like St James’ altogether, or to move out of ground floor premises into 1st or 2nd floor offices. Such moves come with a corresponding lack of accessibility. 

Most important, however, has been the change brought about by the internet. These days, a client can see a picture in your gallery, and, if you’ve bought it at auction fully catalogued (ie, it’s not a discovery or privately sourced painting), can find out on their phone within a minute what you paid for it. Not surprisingly, clients who know you’ve bought a picture for £50,000 are reluctant to give you £100,000 for it. Nobody should be surprised by this; the internet has empowered consumers as never before. 

But the art market is subject to this sort of technological pressure more than many other markets. When you buy a car from a dealer, or your milk from a supermarket, you can’t quickly go to Google to find out the original cost price of either the car or the milk. So it’s easier for the middle man to ask a profit. But in the art world the product is much easier to identify; we’re dealing with unique works that have identifiable titles, creators and images, all of which are easily searchable thanks to price databases like Artnet. Even Google’s reverse image searching now makes it possible to look up the source of ‘sleepers’.  The contemporary art market, of course, is able to shrug off the same phenomenon, because prices are seen to be rising quickly. In a rising market, sometimes it’s helpful to be seen to be paying a record price for a work.

The flip side of this new internet-dominated market efficiency is that many dealers find it hard to compete with auction houses. It also means that dealers don’t bid at auctions as much as they used to, and this can lead to some strange volatility in auction totals, as we’ve seen this week. In most markets, auctions are an inefficient way to sell high value items; you’re exposing your goods to the market on just one day of the year, and are thus vulnerable to a whole range of uncertainties, be it a bad internet connection or phone line interrupting a bid, the fact that someone’s over-spent that week already, or may be ill, as well as wider phenomena like international sanctions directed towards a specific country. Traditionally, markets which revolve heavily around auctions depend on a network of secondary dealers to underpin prices, for those dealers are prepared to hold onto stock for inventory and to meet market requirements at other times of the year. These days, however, none of that applies to the Old Master auctions - it’s mostly private buyers bidding. And when you’ve got literally hundreds of works on offer in one week of the year, it doesn’t take much to soak up the pool of potential clients. Nor do auction houses guarantee their Old Master sales to the hilt, as they do in the contemporary sales.

Furthermore, one of the dealer’s traditional niche advantages, the art fair, is also undergoing changes. Maastricht is, it seems, in more or less permanent decline. Some dealers still do well there. But the writing is on the wall, mainly because it’s too far away, and has not responded quickly enough to the whims of the new rich. Clever dealers are already getting out. Frieze Masters, which for many (including me for a while) seemed like the great new hope - because it’s in London - is also not performing for Old Master dealers.**

There are, however, dealers who are succeeding in the new Old Master market - and more than you might imagine. I won’t embarrass them by naming them here. But I can tell you that they operate in a wholly different way to those dealers who regularly grumble about the declining market. And also that they’re feeling confident and bullish about the future. They tend to focus on one or two genres, and invest heavily in research - which is the only way to compete against the dominance of the auction houses. Dealers can never out-market or out-spend auction houses. But just occasionally they can out-think them.

While I maintain that the demand for Old Master pictures remains strong, I will concede two things. The first is that taste is changing within the sector. It should come as no surprise that overtly religious pictures, especially heavily Catholic ones of gory martyrdoms, are not likely to sell well in these increasingly secular days. The taste for traditional Dutch 17th Century pictures is also showing signs of fatigue. And yet there are other areas of the market that are gaining strength, such as English 16th Century portraiture - witness the close to £1m price for a workshop of Holbein portrait of Henry VIII at his most corpulent last week at Sotheby’s. Ten years ago that would have been a half million pound painting at the most. Indeed, so strong is that particular niche of the market that the picture was bought by a dealer; my former employer, Philip Mould.

Secondly, the Old Master market as a whole is pretty woeful when it comes to promoting both itself and its product. Having dealers whinging publicly about nobody buying Old Masters is bad enough. But how many dealers have good websites, with innovative content? How many make an effort to get out there and sell their wares in both the press and social media? Why am I the only Old Master dealer to have a blog? As ever, the auction houses are leading the way here, with good online videos, and creative marketing. They even make the effort to take Old Master paintings to new markets - both the Bol and the Cranach sold by Sotheby’s were exhibited in China before the sale.

So no, I don’t agree that the Old Master market is dying. For me to believe that, I’d have to believe that interest in Old Masters was declining in general. And yet we’ve just witnessed, in Late Rembrandt in both London and Amsterdam, one of the busiest Old Master exhibitions ever staged, with queues around the block. They’re still making films about Turner, while anything with Leonardo in it seems guaranteed to sell. And (I’m sorry if this sounds like boasting) in ‘Fake or Fortune?’ we regularly get audiences of up to 5m taking an interest in Constable or Van Dyck. In other words, the Old Masters, if presented in the right way, are arguably of more interest to the general public than they’ve ever been. It shouldn’t be that hard to sell them.

Update - an important collector writes:

Great read on the subject.

All I could think was to say: hear - hear!

It is up to the "younger" generation of OM dealers to educate & present their wares in a relevant way.

I myself use to buy/"collect" all the contemporary junk available from my 20's till my 40's....then sold the lot and embarked on a new fantastic journey.

I'm learning daily.

However, I have to be honest with you re dealers complaining and talking the OM market down...this is great for me (and surely for others with deeper pockets) in that prices do not explode as a result of this.

Update II - another reader writes:

The problem also coincides in a decades long declining interest in early-modern history amongst academics. I think there is a need to culturally address how the past can be more than just a fantasy for a middle class holiday, or a weekend pleasure diversion in a gallery. When the Old Masters were most prized was precisely when contemporary artists were inspired by them and fine art education rigorously taught the language of drawing and painting, rather than neo-Dadaist 'sophistry'.

Update III - a sleuthing dealer, responsbile for some of the greatest art discoveries of all time, writes:

Congrats on your article. 

Personally, I'll say times are the best ever for OMP. Connoisseurship is receding at a general there are more opportunities to make 'discoveries. 

Prices for 'true' masterpieces are higher than ever.

Those are the golden years of OMP.

A young dealer & scholar from Europe writes:

I am a reader of your blog since you started it and today I am writing to you to say : Thank you!

Your latest article about the so-called "decline of the Old Masters" is great and you said what I have thought for a long time.

I myself am an Old Master Painting dealer and I might say a young one since I am running my gallery for four years now. And I have to fight exactly with the problems you mentioned: everyone saying OM are not cool, no one wants to buy them and the lack of new ideas for presentation as well as for the selections of paintings you sell. I can only confirm that there are (also young!) buyers for OM and they are absolutely fascinated by these. They mostly cannot believe that you can buy a brilliant painting which is about threehundred years old for a price that is not even comparable to a work of contemporary art (in quality and in price).

Research is another very important thing. And I offer my clients technical and arthistorical analysis as well as the ALR certificate. I also try to find new ways of presentation (at fairs and in the gallery) , including new media/ certain things you wouldn't expect to find with old masters. As my gallery is quite young I have to admit that it is not always  easy to find clients and to catch on with the established dealers. Anyway, I am still trying...

And an economist writes:

Your piece says it all. 

The difficulty with the Old Masters market is that the works appeal mainly to people who can afford them and know something about pre twentieth century art  which is a smaller market but competitive for top works and good pictures generally. It's a good market but isn't likely to expand noticeably because little effort is devoted to expanding the elite sell side versus the populist exhibition side. And the supply of quality works is limited and holding periods are generally long.     

The Contemporary market is much larger appealing to people who can afford it and either know art (like all periods some is worthwhile) or believe what they are told about it or have investment advisers whom they believe or want to belong to the group of competitive collectors (like finding rare coins or antique automobiles).  There is a vast and expanding supply of goods with dealers and in vaults, and the average holding period is probably shorter. Additionally, in some counties like the US there can be government sponsored financial incentives (deductions) to buying and donating art at an appraised value which subsidize the habit/hobby/sport  

As a non income producing asset class - a store of value - it relies on a constant supply of buyers who can't sell any large percentage of their holdings simultaneously or the market will implode. Currently there are plenty of buyers with vast liquidity who would rather hold a Francis Bacon or a Giacometti than more bank deposits or another London property.  

* That said, I should disclose that Christie’s sold a picture for me last week, and I was very pleased with how they handled it from start to finish.

** Masterpiece seems to be doing well, however; I've always been a fan of it. It's a very different fair to the traditional Maastricht and Frieze Masters approach, and that seems to be paying off for picture dealers. Selling at Masterpiece is fine art, however (no pun intended). Over the years I've seen some old-school dealers turn up with the same type of stand they're used to having, with the same pictures, presented in the same way as c.1985. Unsurprisingly, it doesn't work; Masterpiece is not about replicating your first floor gallery - you have to realise that it's a retail environment, catering to the super-rich whose experience of shopping is entirely different from the traditional experiece of art buying. Dealers who have done well there have to be quite careful about which works they take, and how they present them.

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