Krug, Rubens Lure Wine Buyers as U.S. Fights Rise of Hong Kong
At Christie’s International (CHRS)’s first New York wine sale of the year on Jan. 25, Krug Grande Cuvee champagne will flow in the presence of Old Master paintings to inspire buyers to bid big, or so the auction house hopes.
This cross-cultural branding is just one way auction houses, which started rushing off to Hong Kong four years ago, are refocusing in 2012.
Christie’s has discovered that their clients who collect classic paintings also dabble in wine, so the Wines of France sale at 5 p.m. follows Old Masters Part 1 at 10 a.m., with works by Peter Paul Rubens and Anthony van Dyck, and the Art of France at 2 p.m. featuring seductive paintings by Jean-Honore Fragonard. The theory seems to be: they won’t stop spending if you don’t let them leave the building.
How well will the “heavily curated” 156 lots of mostly top Bordeaux fare in New York?
Hong Kong auctions have been sucking attention and wines away from the U.S. As prices skyrocketed there, the best Bordeaux, followed by Burgundy, were often offered in Hong Kong instead of New York.
Of the $478 million sales by major auction houses last year, $230 million came from Hong Kong, while the U.S. took in $146 million. Yet the last few Hong Kong sales showed Asia’s demand for first growth Bordeaux, especially recent vintages, is slowing. Prices are falling.
“New York is still a very strong market,” said Robin Kelley O’Connor, head of Christie’s North American sales. “Buyers are global. And fine wine and great art have a harmonious relationship.” The Jan. 25 sale is a beta exercise; a combo with jewelry or watches may be next.
‘Like to Spend’
“There’s no wine consumer like the U.S. consumer,” said Kevin Swersey, a private wine adviser and consultant to Spectrum Auctions. “They like to spend, they’re savvy about wine. The U.S. is an undervalued asset that’s been overshadowed by Hong Kong.”
One thing that characterizes U.S. auctions is their diversity. Hong Kong focuses on top names in Bordeaux and Burgundy. In the U.S. you also find the mid-tier labels, plus wines from Italy, the Rhone, California, and Germany.
“Only about 10 Burgundy names attract Asian buyers,” said Marc Lazar of Cellar Advisors. “And those are the most expensive. New collectors fare better in the U.S. -- they can take little bites.”
There’s a lot of diversity in the Feb. 4 sale at Tru restaurant by Chicago’s Hart Davis Hart, the leader in U.S. auctions during 2011 with $37.4 million in sales. Its last two events were packed.
Ben Nelson, HDH’s president, was checking six-figure bid sheets for the sale from Brazilian and American collectors when I reached him by phone. “Seventy percent of what we sell is Bordeaux,” he said. “If prices drop 30 to 40 percent, we have to sell more wine.”
HDH’s 1,260 lots include plenty of $50 to $200 wines for actual drinking. Bottles in that price range aren’t expensive enough for auction houses to bother shipping them to Hong Kong to sell. For his clients, Lazar will be bidding for 1999 Burgundies from Nicolas Potel, Sylvain Cathiard, and Anne Gros.
John Kapon, chief executive officer of New York-based Acker Merrall & Condit, the auction leader in Hong Kong, is expanding by adding Chicago to his roster.
His second sale there, on Jan. 28, is at The Elysian Hotel. Kapon enthuses about the company’s worldwide 2011 results -- $110 million, including his online auctions.
“Domestic sales are solid,” he said. “They’re more A to Z, not just A+ bottles.” He acknowledges that Hong Kong can’t go up and up every year, which is why he’s spreading to more markets.
Going to London
Spectrum Wine Auctions LLC in Irvine, California, is expanding to London, partnering with U.K.-based Vanquish Fine Wines Ltd. Their first sale, on Feb. 8, is in the Mandarin Oriental’s Grand Ballroom.
After holding its first sales in Los Angeles, Spectrum quickly moved to Hong Kong in 2010 and 2011 to take advantage of rising prices. It’s the only U.S. house to take on the U.K.
“London sales are solemn daytime affairs in small grey rooms,” said Vanquish’s Richard Brierley, former head of wines for Christie’s in New York. “We aim to build a new convivial style with an evening sale, champagne, hors d’oeuvres, tables.”
Even the catalog looks different, a square shape with a fashionably black, suede-feel cover. The 177 lots of amazing rarities include pricy Romanee-Conti from 13 vintages ($9,500 to $125,000); a jeroboam, magnums and cases of 1961 Chateau Latour (estimates $19,000 to $35,000); 6 magnums of 1945 Chateau Haut- Brion ($50,000); and, of course, some 1982 Lafite (a 6-liter imperial, $23,000).
So far, the U.S. pretty much rules online wine auctions. Frank Martell of Heritage Auctions, which started live wine sales in Beverly Hills as well as regular online sales in 2011, is bullish on the growth of what he calls “auctions with training wheels.”
Winebid.com, the online leader, had $26 million in sales in 2011, while Acker’s online revenue was up 19 percent. Both say a big percentage of buyers are from the U.S.
“This is the future,” said Skip Sanzeri, new CEO of Winegavel.com, a 2009 startup. “It’s where younger collectors will feel comfortable.”
(Elin McCoy writes on wine and spirits for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are her own.)
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