Welcome back to Wall Power’s Inner Circle. I’m Marion
Maneker.
Greetings from Paris. Tonight, I’m sharing my interview with Martin Wilson, the newish C.E.O. of Phillips, who has been making his mark on the company with a new Priority Bidding program. The early results suggest that it’s working. I’ll have more on that below.
But first… |
- Art Basel sales start with a bang: With the usual caveat that these gallery-reported sales may have been in the works for weeks before the fair opened—or might have been big-ticket impulse buys—Art Basel released this recap of the top sales reported by galleries involved in the Paris fair, which opened officially today for V.I.P.s.: Hauser & Wirth sold Gerhard Richter’s Abstraktes Bild, from 1987. It had an asking price of $23 million. What the buyer
actually paid was not revealed. … Pace sold Amedeo Modigliani’s Jeune fille aux macarons, from 1918, for just under $10 million to “a private European institution.” That will be important later on, when we discuss Pace’s announced support for Marc Restellini’s new catalogue raissonné. … White Cube sold Julie Mehretu’s Charioteer, from 2007, for $11.5 million. … David Zwirner sold a Ruth Asawa sculpture for $7.5
million. … Karma netted $3.5 million for Matthew Wong’s White Wave, Black Sand, from 2017, and $450,000 for Gertrude Abercrombie’s Little Interior, from 1960. … Thaddaeus Ropac sold Alberto Burri’s Sacco e oro, from 1953, for €4.2 million. … Yares sold Frank Stella’s Sacramento Mall Proposal #5, from 1978, for around $4 million. … And Gladstone Gallery sold Richard Prince’s
Untitled, from 1990, for $3 million.
There was an unadvertised, extra special session on Tuesday afternoon meant for galleries’ best clients. That event produced some of these sales, but also a modicum of friction around the fair’s ecosystem—I’ll save the details for Friday. (And if you have something you want to share on the subject of the Avant Première, feel free to WhatsApp, SMS, or Signal me at +1.917.825.1391.)
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- Phillips’s sterling sell-through in London: Phillips’ £8 million London day sale, held on Saturday, had an astonishing sell-through rate of 97 percent. By comparison, Christie’s and Sotheby’s both had very solid similar day sales, with 85 percent and 83 percent sell-through rates, respectively. When I asked a senior figure at Phillips what accounted for the strong results, I got a frank response: They didn’t know. The New York midseason contemporary sales had sell-through
rates in the 70s across all three houses, and while the property in London should have been more desirable, the fact that the rate was this high seemed to come out of nowhere. Is this a harbinger for New York’s day sales? We’ll have to wait and see. In the meantime, Martin Wilson discusses the other factors that may have played a role below.
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Now, let’s get to the main event … |
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The newish C.E.O. of Phillips opens up about his innovative new fee
structure, competing for the biggest estates, and how his house is distinguishing itself as the smallest of the Big Three. |
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Late last year, Martin Wilson replaced the long-tenured executive
Edward Dolman as C.E.O. of Phillips. It was, as I noted at the time, a somewhat tortuous succession process. But Wilson was in many ways the steady, logical choice amid all the turnover: He had spent 20 years as a lawyer at Christie’s, where he eventually ascended to global managing director and general counsel,
and then served as general counsel at Phillips for more than six years.
As the smallest of the three global auction houses, Phillips has had to remain ever nimble and creative in growing its business. This summer, Wilson announced a new Priority Bidding program that allowed market participants the opportunity to buy a lot at the low estimate 48 hours before the
auction. If that lot subsequently attracted competing bids, the priority bidder could continue to bid. If they won, they would receive a discount on the buyer’s premium.
Phillips has also developed a reputation as the nice-guy, no-drama auction house, which somewhat differentiates the firm. For its entire modern incarnation, across multiple leaders and owners, it has had a unique role in creating markets for working artists. So I was especially eager to talk with Wilson about how he’s
navigating the narrow channel between remaining creative and not being too disruptive. We also discussed the initial results and feedback from the new Priority Bidding program. As usual, the following has been lightly edited for length and clarity. |
The “More Interesting” Auction
House
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Marion Maneker: One of your great advantages is that
you’re taken seriously by the serious people in this business, but you also keep to a fairly distinct lane.
Martin Wilson: I think that’s true. Part of it also is because we have all been drawn from, I like to think, the top echelon of people in our business. That was very much my predecessor Ed Dolman’s vision and continues to be our vision—the fact that we offer something slightly different from everyone else makes it even more interesting to be around
us. Which leads to another point: I do think that our buyers want to have a really enjoyable experience buying art. |
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A MESSAGE FROM OUR SPONSOR |
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The auction business, and the art business in general, can sometimes be seen as quite
complicated. One of the great opportunities is to make that process of buying art more entertaining, more exciting, simpler, more digital. Even now, buying at auction is fun. Maybe it could be even more fun. Our staff love what they do; they’re passionate about what they do; and they bring that to our clients as well. Because, after all, it’s that sort of infectious sense of passion that brings everyone to the art business at the end of the day.
Is it an advantage not being in the
competition for the biggest estates and most valuable guaranteed property?
We do compete for high-end stuff. We are in the guarantee market as well, just like everybody else, but it’s not the only tool. There are a huge number of different ways you can engage with clients. And there are certain clients, like estates, that prefer to go that route, but there are other consignors who want something different. Our advantage is that we can compete at that top end, but also we have
this connection with living artists.
What we’re seeing at the moment with the younger demographic is they definitely want to be buying living artists. They want to be within the orbit of living artists. They get their information now through Instagram. They will D.M. artists rather than go through intermediaries. So this is a completely different way of interacting with the art market.
There’s been a bit of conversation about the ultra-contemporary market, which I think is a
misunderstanding of what is happening around living artists. Ultra contemporary was really just a handful of artists who were subject to a lot of speculation at a certain point. That’s very different from [the demand for] living artists and people looking for new voices, new creations. In the whole of mankind’s history, people have been looking to engage with new art and have the latest thing on their wall. |
The Priority Bidding Concept
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Let’s talk about your other advantage: You’ve launched this Priority Bidding
program. I know it hasn’t had much of a chance to run, but how did it work in this first cycle of sales, and where do you think it leads you?
We’ve only been doing this for a month and a half. It’s nine sales. It’s worth reminding ourselves of what we were trying to achieve: obviously, greater client presale engagement; and then presale intelligence, which is incredibly important in terms of managing the sale; and then much more competitive bidding activity. I’m really delighted
to say that all of those things have been achieved to a degree that has surprised even us.
We’re beginning to have a lot more conversations with bidders before the sale, which is beneficial for them, but also for us, to understand where their mind is. Before this all started, I would have thought that a 10 percent increase in advance bidding would be meaningful. So we were really surprised when the September editions sale in London registered a 40 percent increase in advance bids. We were
over the moon about that.
But more extraordinary things were to follow, because we then had our Hong Kong and New York sales, and advance selling bids increased by 344 percent year-on-year. It’s beyond anything that I expected. We’ll have to see how it pans out over the whole season. But we can say with certainty that presale engagement has been achieved to a far greater extent than we thought. So we had a level of information, as a result of the amount of advance bidding, that was just
extraordinary.
To give you an example, 70 percent of our Hong Kong evening sale was presold, so we knew that already before the sale. You can then focus your efforts on the lots that need the help, and find bidders for those lots. Incredibly helpful, not just for us, but most importantly for consignors, because they want you to be focusing on their lot if you don’t have priority bids on it. The next stage is to look at the activity during the sale. One of the things that we didn’t know
was, will these priority bidders go on to bid [once the auction starts]? I thought they would, because by taking out a priority bid, effectively you are locking in your lower B.P. rate, and then you can bid on using that lower B.P. rate. |
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Why fritter that away?
Exactly. Some of our clients said at
the beginning, Well, usually I like to wait and see what happens, and I don’t want to give away that advantage. So we always tell our specialists to encourage that, because it’s a perfectly okay strategy, it’s just a different strategy—and the two can run in parallel. But it was surprising to me how many people, having put down the phone, then came back and said, I’ve thought about this, and actually it does make financial sense—if I’m going to be bidding on this, why do I not take
advantage of this? We got a lot of priority bids in that way. And 34 percent of priority bidders continue to bid on in the room afterward. Remember, that is bidding above the low estimate.
They’re pot committed, as they say in gambling. Once they’ve got their money down, they don’t want to let someone else walk away with the thing, especially if there’s a discount to them.
I think that’s right. So then we get to the outcomes. There, what we found was that lots
with priority bids on them performed 50 percent better against their low estimates compared to other lots. That’s great. Among contemporary lots, priority bids performed 66 percent better against their low estimates than other lots. So one might say, Well, that’s a reflection of the fact that priority bids are going to be on the most popular lots. And that’s probably true, but I think it’s an interesting stat all the same.
Beyond performance, is this increasing the number
of bids?
In our first auction to feature Priority Bidding, a London editions sale, we saw 40 percent more advance bids than we had a year ago. Now, six weeks in, across all of our sales, early bids have increased 102 percent.
These are order-book bids at the low estimate that can be executed by the auctioneer. So those are not just lowball bids. They are, by definition, selling bids.
What is extraordinary about that
is: Across all of our auctions this season, we’ve seen a 300 percent rise in selling bids. It excludes bids that are below the low estimate, so this is just purely selling bids. It’s amazing. Obviously, we’re pleased by it. We’re watching the data. We’re going to see what happens next.
Quite often when you come in with a new system or innovation, it favors one particular party in the transaction, perhaps more than others. But in this case, what I like about it is buyers are loving this,
and they’re enjoying the whole strategy of Do I put my bid early? Do I get the lower rate of B.P., or do I wait? They’re definitely engaged with it.
Our consignors are going to love this, because the more certainty you have presale, the better. And of course, for the auction house, it means that we can do our job even better in terms of managing the sales.
On the consignor side, isn’t this going to make the setting of the low estimate even more important and more
strategic?
We know that the setting of the low estimate is critical in all sales, priority bids or not, and there’s always a conversation that happens around that. I suppose what you could say in this case, if you were to have an unreasonably high estimate, or one that would be perceived by bidders as being too high, you’re not likely to get as many priority bids, or possibly any priority bids. But that kind of applies to all bids—if the estimate is too high, people aren’t going
to bid on it. So I agree with you that it requires careful thought where you position your low estimate. But I’m not sure that it changes much in terms of the onus being on everyone here and the consignor coming up with a reasonable low estimate. |
That’s all for today from Paris. More Friday on the week that was.
M |
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