Art: Kravis Sells to Japan

There's a lot of interesting stuff packed into this one paragraph from Carol Vogel's auction report today:

A Degas gouache, "Dancer in Repose," that was being sold by the financier Henry Kravis and his wife, Marie-Josée Kravis, was sought by two telephone bidders. From around 1879, it depicts a dancer sitting on a bench massaging her foot. The Kravises bought the work at Sotheby's in London in 1999 for $27.9 million, and in the summer the auction house gave the Kravises a guarantee that experts said was more than $40 million. On Monday Yasuaki Ishizaka, head of Sotheby's Tokyo, took the winning bid by phone: $33 million, or $37 million including Sotheby's fees.

First, why are the Kravises selling -- and selling such a key piece from their collection, to boot? When Kravis bought the work it was the most expensive Degas ever sold at auction, and that record stood until yesterday, when it broke its own record. That's not the kind of work you sell just because your "taste has moved toward 20th-century modern works", as Bloomberg speculates. Could it be that Kravis needs the money? It seems improbable, but you never know.

Second, Sotheby's is so worried that it's willing to sell works for amounts well below the guarantee, thereby locking in a loss. That's not a healthy sign at all, as far as the market is concerned. Normally, when an auction house guarantees a work, it takes possession itself, and then tries to sell it privately for a higher sum. But Sotheby's clearly didn't want to take that risk.

Third, it looks like the Degas is going to Japan -- which has not been a source of much art-world bidding of late. But the Japanese still like their Impressionists, and this one looks like something of a bargain, from a Japanese point of view. Nine years ago, the painting sold for ¥3 billion; yesterday, it sold for ¥3.66 billion. That's an annualized growth rate of just 2.2%, which includes what by all accounts was the biggest rise in art prices the world has ever seen. Maybe with the crazy strength of the yen these days, the Japanese will become important buyers again. Although there's no indication they're particularly interested in the likes of Damien Hirst or Jean-Michel Basquiat.

Overall, the Sotheby's auction was weak, especially when you consider that it had much bluer-chip artists than next week's contemporary auctions. Those will give us a much better indication of whether the art bubble has finally burst.