Britain’s EU referendum occurred right in the middle of London’s main summer auctions, so that the Impressionist and Modern Art sales were held in the two days before the vote.
It is difficult to tell if nerves about the outcome had any effect on the auctions. During the end of the business-getting period, a month earlier, currency traders were already factoring in a vote for Brexit, an economic recession and a reduction in the value of the pound. What overseas sellers, therefore, would sell in London when the pound was so weak?
Ironically, it was Helena Newman of Sotheby’s who – after a really positive £103 million sale in which a 1909 Picasso portrait made a £43.3 million record for any Cubist picture and a Modigliani portrait £38.5 million – acknowledged that pre-Brexit currency fluctuations had affected consignments and therefore the low value compared to last year’s £178.6 million sale, compounding the shrinkage of sale totals this year.
Looking at the sellers, the Modigliani was being sold by former arms dealer and financier Wafic Said, who bought it in 1986 for £1.9 million, and the Picasso by American collector Sheldon Solow, who bought it in 1973 for £340,000. Clearly, neither were that concerned about a drop in the pound where such masterpieces and profits were concerned. While the buyer of the Modigliani is thought to be from China, industry insiders believe the Picasso was bought by the US billionaire collector Leon Black.
A more telling auction was held the next evening at Christie’s after a day in which the pound’s fortunes had revived on hopes of a Remain win, and where no great masterpieces were on offer. It may have happened anyway, but, with currency bargain-hunters put off the scent, one third of the lots were unsold, three were withdrawn before the sale, possibly because there were no positive signs of interest from buyers beforehand, and an early Monet, estimated at £4.5 million, which Christie’s had guaranteed to sell, did not sell. Apart from thus acquiring a Monet, Christie’s fell short of its £33 million to £49 million estimate, realising just £25.6 million. That total was lower than most people can remember for an evening sale of Impressionist art in London. But few blamed it on Brexit nerves or currency movements – just the quality of the sale. This was only redeemed by another Modigliani, which saw Asian bidding take it up to £8.3 million, and a record for the much-derided Bernard Buffet, whose painting of clown musicians sold for £1 million.
Since Thursday, post-referendum blues have set in for the art world; most artists and curators favoured Remain and will be bemoaning the potential lack of EU funding for exhibitions and projects, among other things. But a few Leavers are raising a jar. Old master dealer Guy Sainty believes the result will be good for the London trade if the result means we can remove the EU’s five per cent import duty on art brought from outside Europe. “It could make us the most important art market centre in the world,” he says. Others hope to see a repeal of the droit de suite – an EU resale royalty payable on works by European artists each time they are sold, which benefits artists and their heirs until 70 years after the artist’s death.
The immediate question for the London market is whether Brexit will affect this week’s art fairs and key London auctions of contemporary art. Estimates for the series are between £165 million and £233 million, heading for a dip from last June’s £290 million sales.
The big money is at Christie’s, where they’re asking £20 million for a Francis Bacon portrait of Henrietta Moraes splayed out on a bed with a hypodermic syringe in her arm, for someone who bought it nearly 10 years ago for a record $15 million.
The masterpieces may be safe from financial worries. But below that level, buyers may not feel confident and will sit on their hands. But then this is the most global of markets. And if the pound is still perceived to be low, overseas buyers using stronger currencies might see it as an opportunity to buy cheaply. It could go either way.