Away From the Block: Auction Houses Are Conducting More of Their Sales Privately

And it’s making art dealers very nervous

Globalism is one of the auctioneers’ strengths. Consider the Russians, the Chinese. “I don’t know any of them,” said veteran dealer Richard Feigen. The auction houses “know where everything is. They will come up with something a client wants that I don’t have. I just think they will do an increasing part of the secondary-market business. The primary market, I don’t think they will be as successful.”

The houses also get buzz.

“When you see a Richter sell for $30 million, that generates a lot of publicity,” said Mr. Feigen. “And people will be inclined to put forward pieces at auction. And that provides a trace base for private sales too.”

How would he advise a young person trying to get into what he was doing?

“I would probably tell them not to do it. I don’t know whether what I am doing is going to exist that long.”

Part of the change can be attributed to artists—particularly those in China. “They have been very adept at establishing links with the artists directly,” Michael Findlay, a director at Acquavella, said of the houses. “And some of the major Chinese artists are very much managers of their own careers.”

In terms of the new buyers from China and other parts of the world where art markets are developing, private sales could, some say, hurt the houses in the long run. “A lot of the new buyers want the security of auction prices,” said Mr. Mayor, the London dealer. “If they channel everything into the private sales, then the quality of the auctions goes down. And the new, uneducated buyer loses his security blanket. It sounds great on paper. But I think, in the end, that will be the end of art sales as we know it.”

Alex Rotter doesn’t think so. He also thinks that, while the dealers’ fears are justified, there is still very much a place for them. “A lot of dealers are worried about how they are going to survive against this machine of Christie’s or Sotheby’s,” he said. “We have more than a thousand people internationally working for us, we have sales rooms in many places, we have offices in even more. From a dealer perspective, they don’t have the reach. We do. So I need to take advantage of it—that’s my business approach.

“My human approach is, we live in a world of Walmart and Costco. But there is still Lobel’s on Madison Avenue … I am not saying that one is Walmart and the other is the deli around the corner. But I am saying that, as a dealer, you have your own taste and you follow that taste. And you grow a community around you. There are certain people that would always rather deal with one person that has a vision, that knows everything about the artist, rather than the superchain. I think that will always remain.”