Popped Art Bubble

When the hammer came down on the last lot at Phillips de Pury's contemporary sale last night, it marked the end of the most brutal auction season in recent memory.

The boutique auction house suffered the worst performance of the two-week period, with only 59 percent of the 51 works on offer finding buyers. The sale brought in $9.6 million (including buyers' fees), a fraction of the evening's $23 million low estimate. It didn't help that five works were withdrawn at the last minute by nervous sellers, including pieces by Richard Price, John Currin, and Anselm Kiefer.

The top lot at Phillips--and the only piece that sold in excess of $1 million--was Donald Judd's Untitled (77/23 - Bernstein). It brought $3.2 million including fees, below the estimated range of $4 million to $6 million.

One of the few pieces prompting lively bidding was Anish Kapoor's 2003 Untitled (Mirror), which attracted four interested parties and sold above its high estimate for $782,500.

One consolation for Phillips is that, unlike larger rivals Christie's and Sotheby's, the auction house has all but stopped offering financial guarantees to woo sellers, a practice that leaves auctioneers vulnerable to substantial losses if works fail to sell or sell below estimates. Only one of the 51 lots offered on Thursday night had a financial guarantee, compared to 39 of the 75 lots offered at Christie's the previous evening.

That sale faired slightly better, with 68 percent of contemporary works finding buyers. But Christie's is likely to have lost a significant amount of money in guarantees. The evening totaled $113.6 million, half the presale low estimate of $227 million (and one third what Christie's brought in at its May evening sale of contemporary works). More than half the lots sold below their low estimates, and 12 of the 39 guaranteed works didn't sell at all, with a combined low estimate of $48 million.

A collection of 16 drawings owned by Lehman Brothers C.E.O. Richard Fuld and his wife, Kathy sold for a total of $13.5 million, below the low estimate of $15 million, and not close to covering a guarantee by Christie's that was said to be as high as $20 million.

Among the unsold works was the auction's projected top lot, a 1964 Francis Bacon entitled Study for Self-Portrait' that Christie's had estimated would sell for $40 million to $60 million.

The evening's surprise top lot was Gerhard Richter's 1989 Abstraktes Bild (710), which sold for $14.9 million. Metallica drummer Lars Ulrich sold a 1982 Jean-Michel Basquiat painting, Untitled (Boxer) for $13.5 million, above the $12 million estimate.

Contemporary art auctions at Sotheby's and Christie's tallied a combined $238.7 million this week, 44 percent below their expected total of $429 million.

Among the most disappointing performances this week were works by Andy Warhol, which either sold below low estimates or did not sell at all.

The market for Damien Hirst, who brought record prices at a single artist auction at Sotheby's in September, has cooled significantly since. At Sotheby's on Monday, the 2007 painting Midas of Phrygia sold below the low estimate of $1.2 million, while one of the artist's so-called "dot paintings" found no bidders. At Phillips last night, the 2007 painting Beautiful Artemis Thor Neptune Odin Delusional Sapphic Inspirational Hypnosis Painting, estimated between $3 million and $4 million, failed to sell.   

The week of contemporary and post-war auctions follows on Impressionist and modern sales last week, which endured similar price reductions due to turmoil in financial markets. Christie's and Sotheby's sold about $418 million of art over three nights last week, below their combined low estimate of $682 million. The total was off about 37 percent from $665 million a year ago.

Most notably, Mark Rothko's 1960 No. 43 (Mauve) was estimated to bring up to $30 million, and failed to sell at all. Manet's 1880  Filette sur un banc was expected to sell for up to $18 million, and also drew no bids.

Consider the art market corrected.