Christie's Chief Steven Murphy. Image Courtesy: Reuters
When the public sits up and notices the art market, it is usually when an anonymous buyer pays a mind-boggling sum to acquire a prized painting or sculpture.
In 2012, Edvard Munch's The Scream fetched a record $120 million, a Mark Rothko abstract soared to $87 million and a Renaissance drawing by Raphael sold for $48 million - all in a year when making ends meet was most people's priority.
Yet Steven Murphy, the first American to head the auctioneer Christie's since its creation in 1766, is convinced the key to future success after another bumper year of sales lies not with the one percent, but a much broader pool of art lovers. The 58-year-old wishes to rid the art world of its stuffy image as a club exclusively for the rich.
"Twenty percent of our buyers in the past year were brand new to Christie's,” he said. Murphy was referring to one of the encouraging statistics in the company's annual sales report, which on Thursday showed record revenues of £3.9 billion ($6.3 billion) in 2012, a rise of 10 per cent on 2011.
In 2009, when the art market contracted sharply due to the global financial crisis, sales were just £2.1 billion.
The Asian Market
The overall increase in 2012 came despite a slump in Christie's auction sales of Asian art, which fell by a quarter to £415 million. Competition from Chinese auctioneers and the end to a speculative bubble in some Asian art contributed to the decline. Murphy however believes the region has to grow again if tapped into.
In contrast, Christie's saw private sales surge 26 percent to £631 million. Murphy expected deals behind closed doors to be key in maintaining growth in 2013 and beyond. But business in the auction room will continue to remain Christie’s mainstay.
A key part of Murphy's strategy since arriving has been to build an online presence, both by attracting visitors to the website and encouraging them to bid over the internet. From six online-only auctions in 2012, the company will hold more than 30 in 2013. Digital sales tend to be for more modestly priced items, Edward Hopper's October on Cape Cod sold for $9.6 million to an internet bidder in November.
The Art Attack
Murphy also feels like the cultural surge around the world toward the experience of art has created opportunity for Christie’s. “Museum attendance is way up on the previous year and the year before that. People are accessing art on their iPads, on their laptops, on their iPhones," he added. By means of online presence, the auction house aims at capturing more business in the mid- to lower-tier markets.
Murphy pointed to a 20 per cent rise in sales at Christie's South Kensington offices, which specialize in lower-end art and antiques. For Christie's, that sector is key in terms of the bottom line because profits from it outstrip those from more high-profile post-war, contemporary, impressionist and old master art, Murphy said.
Drawing attention to a growing trend he says, “People of wealth are choosing not to invest in other areas, and therefore they have more available for the activity they already love, so it's not money management as much as personal choice."
But what happen if equities start to pick up again? "I am here to say that when the markets go up there is more money to spend so actually our sales go up, so we don't want to see the stock market do anything but go up."
Christie's, a private company owned by French billionaire Francois Pinault, does not report profit or loss, only sales. Its main rival is Sotheby's, slightly smaller in terms of sales. Sotheby's, listed in New York, posted auction sales of $4.4 billion last year versus $5.3 billion at Christie's.
Murphy confirmed the company was in the black. When asked whether it was more profitable now than when he joined in late 2010, he replied: "I can say that we're very happy. There's wind in our sails."
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