Auctioneer Christie’s Finds Itself Sitting Pretty

It is a good time to be Ed Dolman. The chief executive of Christie’s, the 240-year-old auction house, is riding the upsurge in the art market for all it is worth.

The boom in postwar and contemporary art has given Christie’s a record first half in sales and a good chance of beating its archrival, Sotheby’s, for the full year.

Dolman has sought to capitalize on the upturn in contemporary and Asian art by modernizing Christie’s London rooms and opening new offices in the Middle and Far East. It has also revamped the company’s marketing and sought to cut out dealers by trading directly with collectors.

For Dolman, who spent the first two years of his six-year tenure dealing with the fallout from an antitrust scandal and the next three grappling with a sharp downturn in the art market, the news these days is all good.

Prices of fine art have risen by 13% in the last year, and the market is showing the strongest growth in 15 years, according to Artprice.com, an industry tracker.

Ten years ago, postwar and contemporary art accounted for only 8% of Christie’s total sales. Last year, it was almost 20% and rising, as artists such as Andy Warhol, Lucian Freud and Jean-Michel Basquiat edged out Renoir, Manet and Matisse in the list of 10 biggest sellers worldwide. But the sector can be more faddish than others. In the late 1990s, a similar boom in contemporary art went bust and sales fell by 70%. Two years later, they popped up again, illustrating just how volatile prices could be.

Dolman, a 20-year Christie’s veteran with a low-key personal style, is convinced that this is no bubble: “I think there has been a really significant change in taste. People are becoming increasingly interested in buying art that is meaningful for them.

“In the 1970s and 1980s, if you were a young couple in London buying a house, you wanted to decorate with Victorian and Georgian furniture because it was what everybody did. There’s been a huge swing away from that. People now want to be associated with icons from their own time. It is a drive to modernism, and we are seeing it across the globe.”

Dolman started in the Christie’s furniture department and made his name jazzing up the company’s fusty main auction rooms in London’s South Kensington area with a marketing push and with moves into pop culture and entertainment memorabilia.

Christie’s and Sotheby’s could have ended up as genteel anachronisms in the increasingly global and competitive art and antiques business. Instead, in the last 50 years, they have had an almost extraordinary rise to dominance. In 1960, they did $33 million of business, equal to $209 million in today’s money. Last year, their combined sales were more than $4.2 billion, a twentyfold increase from 1960 in real terms.

They have become sharp marketers, ever on the lookout for new sectors to exploit, sucking up business largely at the expense of dealers and smaller auction houses. The rebound in the art market has helped put the antitrust scandal, which saw the principals of the two companies found guilty of colluding to fix prices, firmly behind them.

Dolman stepped up to the top job at a low point after Chief Executive Christopher Davidge had quit suddenly. Weeks later, the group said it would turn over information on Davidge to the U.S. Justice Department, which had been conducting a criminal antitrust investigation. Christie’s and Sotheby’s finally settled with regulators in 2000 for hundreds of millions of dollars.

Sotheby’s easily had the lion’s share of the market 40 years ago. But Christie’s, which was bought by Francois Pinault, the French luxury goods mogul, in 1998, has been slowly creeping up on its rival, and the two have been neck and neck throughout Dolman’s tenure.

Dolman looks like the rugby player he once was -- he retains great enthusiasm for the sport -- and says he always had an affinity for the numbers side of the art business.

During the recent downturn, he cut the company head count to 1,800 from 2,400. Now, he says, “we are looking to dominate the high end of the auction market and to grow geographically the middle and low end. We want to actively expand our private dealership and develop the online operations.”

Both auction houses have found new markets as old ones faltered. Sales of Old Master paintings, once a mainstay, have been flat for many years. Books and manuscripts, the segment of the market on which Sotheby’s was founded, has likewise been in the doldrums.

Impressionists and modern works, which hit stratospheric prices in the early 1990s, are less popular now and suffer from the paucity of high-quality works available.

Most of the really good art is already in museums or private collections, leaving auctioneers scratching around the second- or even third-tier works.

The new wave of contemporary works has provided a solution, Dolman says, who expects his recent record sales run to continue.

“It’s incredibly good news for us,” he says of the boom in postwar art. “It’s a solution to the supply problem. The success of the company in the ‘60s and ‘70s was built on a steady stream of great Old Masters and incredible Impressionist pictures coming to market. Those pictures don’t come to the market anymore. But $15 million for an Andy Warhol stacks up very nicely against anything we’d get for an Old Master.”

Meanwhile, the Asian market has taken on new importance, accounting for about 16% of Christie’s sales last year. Chinese and Russian buyers have emerged to buy back their heritage as well as buying contemporary works. Last year, the sale of Chinese artworks more than doubled at Christie’s, which has had to move into new premises in Hong Kong to meet the demand.

In April, it opened the first of four planned offices in the Middle East. “We see enormous potential in the Middle East,” Dolman said.

He is also eager to seek out more private sales, which last year added up to $62 million for Christie’s. It is the auction houses’ growth in these so-called private treaty sales -- typically they go out and find a particular piece on behalf of a buyer -- that is squeezing dealers.

“We’re getting more private sales each year, and we’re actively pursuing that because there’s a demand for it,” Dolman said.

“The auction houses are becoming increasingly powerful vis-a-vis the dealers,” Dolman said.

“In the past 10 to 15 years, the auction houses have become much more aggressive in marketing. We have spent a lot of money on developing direct relationships with key collectors. How many dealers in Impressionist and modern art are there left? You cannot find many. That market has moved increasingly to the auction room.”