Wednesday, 7 October 2009

Sotheby's Auction House Sold in Australia

Here is another good article specifically about Tim Goodman's purchase of the Sotheby's Auction house in Australia. I would expect we will hear a lot more about this in the following weeks. Stay tuned!

Fine art of a deal maker

Gabriella Coslovich
October 3, 2009

IF YOU were looking to buy an auction house, you couldn't aim higher than Sotheby's. As prestige brands go, only arch-rival Christie's - owned by French tycoon Francois Pinault, who paid $US1.2 billion for it in 1998 - compares.

Sydney-born auctioneer Tim Goodman is no billionaire (yet), but he has long coveted the Sotheby's name - and the kudos that comes with it. Since his first encounter with Sotheby's as a 22-year-old on work experience at the auction house's fashionable London office in 1974, he has dreamed of working with the multinational.

He has gone one better. In a move that astonished the Australian auction world, Goodman this week bought the licence to Sotheby's Australia, ditching his own company, rival firm Bonhams & Goodman, in the process. The terms of the sale are confidential, but The Age believes Goodman got himself a bargain, snapping up Sotheby's Australia for a figure in the low millions.

That Goodman would so desire the name of Sotheby's says much about the circles he moves in, a world where image and status mean everything.

The selling of art on the secondary market is a trade, but it is a trade that cloaks itself in a fine cashmere coat of exclusivity and noblesse. Auctioneers are essentially salespeople - but what they sell is luxury goods, trophies for those with enough disposable cash to display a Brett Whiteley or John Brack or Albert Tucker on their wall. Auction nights are like select social events, alcohol is served - sparkling, white, red - and white-gloved assistants, generally beautiful and young, delicately bring out art works over which begins an adrenalin-pumping contest for possession. Which is not to say that people don't collect art for the passion of it, but at the highest levels it is ego and competition that keeps those bidding paddles popping up in pursuit of that rare and luscious object everyone wants.

It is no coincidence that Pinault, owner of Christie's, also controls a luxury goods group whose brands include Gucci, Yves Saint Laurent, Bottega Veneta and Alexander McQueen. Nor is it a coincidence that Sotheby's Australian headquarters is in the blue-chip terrain of High Street, Armadale. There is an almost geographical hierarchy in the positioning of auction houses - Bonhams & Goodman is situated in slightly less chichi territory, in Malvern Road, Prahran.

But Timothy David Goodman, 56, who has said he had visions of being "the next Kerry Packer", was never going to be satisfied being a minor player in the bullish, macho and image-conscious game of art auctioneering. Three out of four of Australia's most expensive paintings were sold at Sotheby's. The wealthiest and most conservative of art collectors, those who want to be associated with a brand oozing aristocracy and tradition, sell and buy at Sotheby's. Goodman desperately wanted a slice of that action.

He is not the first auctioneer who has made a play for Sotheby's Australia. Others have pursued the brand name - but their timing was not right. With a nose for opportunity, and wounded prey, Goodman made Sotheby's Holdings an offer too good to refuse.

He is driven, determined, autocratic, tough, a man who lives and breathes his business, whose job is his world. This week he revealed the extent of his ambition.

The news stunned the art world for two reasons. It is no secret that Sotheby's Holdings, whose headquarters is in New York, has been profoundly affected by the economic downturn. Shares and profits have plummeted (June-quarter figures showed that Sotheby's profits were down 87 per cent), and the company has been reviewing its operations and regional offices worldwide. If anything, industry observers were expecting the financially troubled Sotheby's to pull out of Australia as Christie's did in 2006. They did not expect Sotheby's to sell the licence to the brand name "Sotheby's Australia". They certainly did not expect Sotheby's to sell the brand to Tim Goodman and the other directors of First East Auction Holdings Pty Ltd.

"Obviously the culture at Sotheby's is somewhat different to what he's accustomed to," says Goodman's fiercest competitor, Rod Menzies, of leading Australian auction firm Menzies Art Brands.

Short, well-padded and ruddy-cheeked, Goodman is one of the few auctioneers in town who does not affect an Oxbridge accent. He takes to the auction stand with an affable, bossy and unashamedly Australian manner and cadence, a robust sense of humour, and a salesman's gift of persuasion.

He plays as hard as he works. By all accounts he is fond of a drink, has a keen eye for the ladies, and has been known to frequent the sorts of gentlemen's clubs where one's social class and alma mater have no bearing. Some find his character bordering on the boorish, others see it as refreshing in an industry rife with pretensions.

"He is one of those great Australian characters," says the loquacious Sydney art dealer Denis Savill. "He's like the John Singleton of the art world. That's a compliment, by the way. John's a friend of mine, but he's a wild one, and I know when to avoid him."

After his year of work experience with Sotheby's in London, a world he described as a Dickensian fantasy land, Goodman returned to Australia in 1975 and became the youngest fine art auctioneer in NSW, working for Geoff K. Gray. When Gray was bought out, Goodman lost his job and struck out on his own. After a varied and at times financially perilous career dealing in art, and running an art gallery, a jewellery auction house and even a publishing venture, Goodman established the Goodman auction rooms in the posh Sydney suburb of Double Bay in 1992.

His self-described "big break" came in 2003 when he was approached by Robert Brooks, chairman of British auction house Bonhams. For the past six years, Goodman has been the chief executive of Bonhams & Goodman auction house, which has been trying to establish itself as one of Australia's main players. But allegiances come cheap in the cut-throat world of art auctions. In buying the licence to the Sotheby's Australia name, Goodman has severed ties with Bonhams and his long-time friend Robert Brooks. Goodman will terminate the licence to use the Bonhams' name on December 22. Sentiment was never going to get in the way of Goodman's dream.

On Tuesday night, a furious Brooks was flying to Australia to sort out the mess Goodman had left him. He has launched action in the NSW Supreme Court to ensure that Goodman continues to use the Bonhams brand in Australia until December 22.

The next few months will be interesting. With three more Bonhams & Goodman auctions scheduled for the year, and two more Sotheby's auctions, where will Goodman's loyalties lie?

Meanwhile, Damian Hackett, an executive director of Deutscher and Hackett, is rubbing his hands at the thought of fewer competitors. "Yesterday I was competing with Bonhams & Goodman and Sotheby's and in the very near future we will be competing with just one of those firms, and that one firm will have quite a different nature," he says. "I will certainly bounce out of bed tomorrow morning with a renewed spring in my step.''

In the art auction world, trust is everything - and Sotheby's art specialists, such as head of Aboriginal art Tim Klingender, head of Australian paintings Georgina Pemberton, and chairman Justin Miller, come with a reputation for integrity and expertise.

Goodman himself this week spoke of his ''enormous respect for the brand, the company and the staff'', adding that "at this time" he had no plans to make any changes to staff.

But it would be naive to think that there will not be cuts, and Sotheby's Australia staff, who were only told of the takeover on Monday, are worried about their futures, and about working with a man whose managerial style is markedly different to that they know.

But something had to give at Sotheby's Australia.

"Sotheby's performance over the last 18 months suggests that it may have been under threat from its overseas masters. Tim Goodman may well be regarded as a white knight," says Sotheby's Australia's former managing director Mark Fraser.

LAST financial year, Sotheby's Australia made a profit of $1.2 million, down from 2007's $5.08 million. Its sales revenue from auctions was slashed by more than half to $24.8 million, down from $49.5 million in 2007.

But all Australian art auction houses have been doing it tough in the economic downturn. The major players, in order, are Deutscher-Menzies, Sotheby's, Deutscher & Hackett, and finally, Bonhams & Goodman. Their greatest difficulty has been competing for quality stock - in uncertain economic times collectors have been holding on to their art, unless forced to sell.

Last year the total turnover in Australian art auction sales was $114 million, down $60.9 million on 2007, a fall of almost 35 per cent. In future years, the total sales achieved in 2007 of $175.6 million may be viewed as a market aberration.

Rod Menzies, of Deutscher-Menzies, says that a contraction of the industry was necessary. "There are too many auctions houses … there is no doubt that one player had to exit this year," he says. "From an Aussie's perspective it's interesting that the two multinationals clearly no longer desire to trade here."

Is that a bad sign for the Australian art market?

"I don't know. I think there have been other issues for Sotheby's and Christie's worldwide. But it's certainly survival of the fittest. I think Tim's got a good chance of making a go of it. I am looking forward to the competition. Tim's a serious competitor and so am I."

Gabriella Coslovich is senior arts writer.

Bombshell Hits The Aboriginal Art Auction Marketplace!

There has been a Massive shake-up in the Australian Art Auction marketplace with the announcement that Tim Goodman of Bonhams & Goodman has purchased the licence to Sotheby's Australia. This is not an acquisition of the two companies with Tim leaving the auction house that bears his name.

This is a major change in the playing field and there will be many interesting times ahead as Tim and his former partner work out how this changeover is going to work.

There are a number of good articles about this major announcement. I will post them up here on the blog. The first is by Aboriginal Art expert and former Head of Aboriginal Art for Lawson~Menzies and Managing Director of Menzies Art Brands Adrian Newstead. It's a great article by a man who knows the Aboriginal Art Auction market better than most.

Have a read......

Deutscher and Hackett Aboriginal and Oceanic Art Sale looks ‘Back to the Future’.

By Adrian Newstead, on 02-Oct-2009

What a difference a day makes! On the same morning that the Deutscher and Hackett Aboriginal and Oceanic Art catalogue arrived on collectors’ doorsteps, Tim Goodman announced that he had purchased the Sotheby’s Australian franchise. Two unrelated events to be sure, however both are likely to impact on the direction of the Aboriginal art market during and beyond the current economic downturn.

At the peak of the market in 2007 Aboriginal art sales comprised $23.7 million of the $175 million art auction market in Australia. However following poor sales and the closure of Joel Fine Art, the market dived 50%, prompting both Sotheby’s and Menzies Art Brands to reduce the size of their Aboriginal offerings while attempting to lift their minimum lot value to $6000.

The less than impressive results that followed, saw Sotheby’s hold their least successful sales of Aboriginal and Oceanic art since the new millennium while Menzies Art Brands Aboriginal sales shrunk from $9.1 million in 2007 to less than $1million per quarter in 2009.

Aboriginal art has been a centre piece of Sotheby’s Australian success since the mid 1990’s, and the Goodman purchase will have been in part informed by their flagging fortunes. An number of industry insiders have been wondering more and more openly, how much longer Sotheby’s and MAB could continue to recycle high end works with indecent haste in order to maintain market share, without loosing credibility. This has been a particular problem for Sotheby’s given the dearth of high value quality material, and their acceptance of such a narrow band of provenance for Aboriginal artworks.

What any of this has got to do with the current Deutscher and Hackett offering? In my opinion, just about everything!

While the production, scholarship, and quality of the D + H catalogue is as good any that has been presented to the market during the last decade, only two works in the entire sale have a value in excess of $100,000 and only 11 fall between a lowly $20,000 and $100,000.

However the sale turns the general auctioneers rule of thumb that 80% of the value of a sale should be in 20% of the works completely on its head. Here just two works, or 0.7% of the offerings represent 23% of the total value on low estimates.

D + H specialist Crispin Gutteridge has defied conventional wisdom by selecting no less than 259 works under $20,000 of which a staggering 230 are worth less than $10,000. The result is a sale containing 277 individual lots with a total value of just $2.04 million on low estimates.

I cannot remember a sale presented so lavishly with so few works of major importance or distinction. Generous essays of the length generally reserved for works worth in excess of $100,000 are afforded to paintings carrying estimates as low as $20,000.

Estimates are however conservative and, as a result, I expect the sale to kick off with a bang with a 90% + clearance rate for the first 50 lots and up to 85% for the next. Whether this success rate can be sustained thereafter however, will be the acid test for this approach.

The highest priced work in the sale has a very fine pedigree, and is illustrated on the catalogue cover. Yillimbiddi Country, 1988 (Lot 26) by Rover Thomas was originally sourced through Warringari Arts in Kununurra and was shown at the Adelaide Biennale in 1990. It was loaned to the Art Gallery of New South Wales in 2000 and included in three different curated exhibitions between 2000 and 2003. When sold by Sotheby’s in July 2003 (lot 127) the painting achieved a price of $376,750 including BP. Carrying an estimate of $350,000 to $450,000 this time around it would appear to be good buying.

The impression of success or failure for the sale depends on the need to get this work away. The failure of this single lot would reduce the success rate by value by 17% and make an otherwise successful result appear mediocre.

In a most unusual move, the second most valuable work in an entire sale, Paddy Bedford’s Mendoowoorrji Medicine Pocket 2001 (Lot 10) is placed very early in the catalogue. The provenance is excellent, as this large work is included in the artist’s catalogue raisonnĂ© published by Sydney’s Museum of Contemporary Art, this will be the third time it has changed hands since originally purchased. While it could not be described as one of the artist’s finest major works, it is nevertheless good example. Major paintings by Bedford are very hard to come by. He painted relatively prolifically for no more than 6 years and his paintings are much loved and tightly held.

Only two early Papunya boards appear, and once more they are early in the sale and estimated keenly. Both were illustrated in Geoffrey and James Bardon’s landmark publication, Papunya, A Place Made After the Story.

Johnny Warangkula’s Water Dreaming at Kalipinya 1972 (Lot 7) is estimated at $35,000 to $45,000, and sold for $38,050 including BP when last offered in July 2001 at Sotheby’s (lot 74). While a work on this theme created during the same year holds record price for the artist at $486,500, and another has sold for $206,000 these records were set prior to 2001, and the majority of his best prices were achieved during the 1990’s. The $35,000 to $45,000 estimate is conservative and this work should sell well.

Mick Namarari’s Untitled (Dingo Ceremony), 1971/1972 (Lot 8) is an iconic work that has appeared at auction previously on two occasions during the last decade. It achieved a price of $35,750 against a presale estimate of $25,000 to $35,000 (lot 133) in Sotheby’s July 2001 sale but is recorded as having failed to sell two years later when offered once more at the same estimate. Once again it carries a low estimate of just $25,000 and at this price would seem to be exceptional buying.

Lot 9 however, a very fine work on cardboard, A Pair of Wanjina, by Charlie Numbulmore, (Lot 9) has been in the current vendor’s family since first purchased in 1970 and is entirely fresh to the market. Only 25 works by this artist have ever appeared at auction, and all but one has sold resulting in a 96% success rate. His very impressive figures at sale make him statistically the sixth most successful artist in the secondary art market in the history of the Aboriginal art movement. The catalogue entry includes a very good essay on the Numbulmoore by Kim Ackerman, and estimated at $40,000 to $60,000 this work should be very keenly contested.

Despite the large number of works estimated below $20,000 there are many nice pieces worthy of mention. They include the three works by Freddy Timms, all of which were originally purchased from Frank Watters. These include two of his earliest colour field paintings, and another from his 1999 solo exhibition that focused on the story of the early 20th century Aboriginal rebel, ‘Major’.

Other works that deserve attention are the lovely Jungura and Jambin, 2002 by Rusty Peters (Lot 83) and the large collaborative painting by the artists of Ampilawatja (Lot 99).

Crispin Gutteridge will have been delighted to have secured, the iconic image Sexy and Dangerous (Lot 17) by urban artist Brook Andrew. Andrew has been feted as one of the most successful Aboriginal urban photographic and graphic artists of recent times but, in common with Tracy Moffatt, he has proved, at least in the secondary market, to have been a bit of a one trick wonder. While 18 of the 27 works that have been offered at auction have sold, variations of this particular image hold all of his 4 highest records.

Bonham’s and Goodman set a record price of $84,000 for a copy of Sexy and Dangerous in August 2007 (lot 111). However the next three highest prices all fall between $33,400 and $36,000.

Another artist in the same boat as Brook Andrew in this regard is internationally renowned Tracy Moffatt. With a widely diverse oeuvre Moffatt’s peevish reaction to the fact that works from her iconic Something More series, made as early as 1989, hold 9 of her top 10 results at auction, has been to refuse permission for their reproduction. Hence, Lot 19, estimated at a very reasonable $30,000 to $40,000 is not illustrated in this, or any other, catalogue.

Collectors would be wise not to overlook the works on paper by Kitty Kantilla, whose solo retrospective was held at the Ian Potter Centre during 2007. While Untitled, 2001 (Lot 14), a work on canvas exhibited in the retrospective carries an estimate of $30,000 to $40,000, it is hardly bigger or any more accomplished than the work on paper Jilamara, 1999 (Lot 63) estimated at just $5000 to $7000. Jilamara, 1997, (Lot 67) another fine work on canvas would appear inexpensive at just $14,000 to $18,000.

Amongst the many other works, those bark paintings most worthy of attention are by the North East masters, Mawalan Marika (Lot 33), and Mungurrawuy Yunupingu (Lot 32) and Western Arnhem Land’s Lofty Nadjamerrek (Lot 5).

The sale abounds with paintings from Balgo Hills though the majority it appears, are owned by a single vendor. All were collected in the mid 1990’s and created during James Cowan’s tenure at the art centre. Cowan delighted in using the art coordinator’s residence as a de facto art gallery and after wining and dining visitors he would sell the works directly off the walls of his home.

Unfortunately, while some of the works do stand out, the majority are not representative of the artist’s finest, nor do they represent the most important early period in which they painted. All however appear keenly priced and represent good buying at their estimated values.

This D + H offering makes a most fascinating sale. While commercial galleries appear to have lost customers to the tourist galleries for works under $15,000, and are surviving on fewer sales of high end pieces, this D + H sale may well turn the auction market on its head.

It is more than a decade since so many works with age and values under $10,000 were on offer and promoted through a catalogue of such quality. Its results should be studied closely by industry observers especially Sotheby’s Australia’s new owner Tim Goodman, as they will prove to be the single most valuable barometer of the market yet, as we head in to 2010. With other recent Aboriginal sales failing to excite the market D + H may well be leading us ‘back to the future’

About The Author

Adrian Newstead is an Aboriginal art specialist, dealer, and commentator, based in Bondi, New South Wales. He co-founded Coo-ee Aboriginal Art Gallery in 1981 and until 2002 worked closely with Aboriginal communities throughout Australia. In 2003 Adrian became the Head of Aboriginal Art for Lawson~Menzies, and in 2007, Managing Director of Menzies Art Brands. He resigned from this position at the end of 2008, to return to working once again with artists and art communities.


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