A Tale of Two Evening Sales, Repeated

Christie’s Stumbles in its Autumn 2018 Sales
By A&M

Christie’s and Sotheby’s had two starkly contrasting sales for the Autumn 2018 sale season, most evident in the two houses’ respective evening sales. Sotheby’s moved a gigantic HKD1.56billion (USD200million) worth of art on 30 September, the highest sale total ever for an evening sale in Hong Kong made by any auction house. On 24 November, Christie’s staggered its way to a HKD424million (USD54million) sale, only slightly more than a quarter of its competitor’s sale, and more than half off its Spring 2018 evening sale which registered HKD1.04billion (USD132million).

Zao Wou-Ki, '22.07.64', 1964, oil on canvas, 161.5 x 199.5cm. Image courtesy of Christie's.

For those who have been observing the market for a while, this comes across as a chilling replay of events a decade ago in Hong Kong during the blowout of the global financial crisis. However, the underlying circumstances are very different behind Christie’s spectacular fall in Hong Kong last weekend, ten years on from the tsunami effect of the global crisis.

When Sotheby’s kicked off the sale season in early October 2008, the art market was still relatively insulated from the turmoil of the financial markets, though Lehman Brothers had fallen a fortnight ago. When Christie’s closed the sale season in Hong Kong at the turn of November to December, the entire market had realised the global magnitude of the financial crisis and Christie’s diminished sales demonstrated the aversion and prudence of a new world order.

Now compared to a decade ago, the blowout of 2018 at Christie’s Hong Kong had everything to do with the overwhelming pressure the auction house receives from powerful sellers at the top end of the market. This pressure has been building up into tension-filled evening sales of late and it had become a matter of when the pressure would finally boil over.

Chu Teh-Chun, 'Untitled', 1963, oil on canvas, 195 x 243.5cm. Image courtesy of Christie's.

The Christie’s evening sale carried four ticking bombs: a pair of estimate-on-request (EOR) Chu Teh Chun, ‘N°313’ and ‘Untitled’, for which the house was seeking HKD90million and HKD120million respectively (the current highest priced Chu Teh-Chun to have transacted at auction did HKD91.8million). The first, Lot 4, Zao Wou-Ki’s ‘22.07.64’ tipped slightly over the psychologically strong one hundred million mark on the hammer to realise HKD115million. The next two, Lot 20, Chu Teh Chun’s ‘N°313’ and Lot 21, Chu Teh-Chun’s ‘Untitled’ sank into oblivion. Lot 25, Zao Wou Ki’s ‘Untitled (Golden City)’ followed the two earlier Chus, failing to clear. After this, there were 30 more lots to go but the market was too spooked, and a clutch of other hopefully estimated works such as Lot 33 Wang Huaiqing’s ‘Fossil’ and Lot 39 Zhou Chunya’s ‘Red Hugging Lovers’ were bought in too.

Wang Huaiqing, 'Fossil', 2000, oil on canvas (diptych), 200 x 330cm. Image courtesy of Christie's.

By contrast, Sotheby’s had managed its biggest lots well at the start of the Autumn 2018 season, finding a new world record price for Zao Wou-Ki’s ‘Juin-Octobre 1985’ and managing the others well. Read here a review of Sotheby’s Autumn 2018 sale in Hong Kong.

At Christie’s, three of the four EOR lots having failed to find buyers plainly indicates Christie’s strategic mismanagement. They had optimistically clung on to their recent shaky record of being able to find a buyer each time in their push at the top end of the market. With EOR lots, what the auction house has is the option to adjust the seller’s reserve price at the last minute to make a deal happen. In the case of the unsold lots, it was clear Christie’s could not convince sellers to match the price points potential buyers were ready to pay. Ultimately, the sale detonated on Christie’s, blowing away any semblance of its ability to handle the top end of the market. The reality of the market caught them out this time round.