Broad Sees Correction in Art Market as Armory Week Begins

  • Schwarzman says he's 'just looking around' at New York show
  • Armory Week includes hundreds of international galleries

"It’s time for a correction” in the art market, billionaire Eli Broad said.

Broad had just arrived at the VIP opening of the annual Art Show at the Park Avenue Armory where guests -- including actor Steve Martin and financiers Tom Hill, Don Marron, Joel Ehrenkranz and Peter Kraus -- munched Peking duck rolls and bourbon-drenched meatballs. The Tuesday event marked the beginning of Armory Arts Week, this year’s first big test of art fair sales, which have been expanding in recent years.

Eli Broad
Eli Broad
Photographer: Jin Lee/Bloomberg

“The great works of art will still bring buyers,” said Broad, a major collector of postwar and contemporary pieces. “The works in the middle are going to be harder to sell. But it won’t collapse.”

The art market is showing signs of a slowdown after five years of growth amid roiling financial and commodities markets. Auction sales are down 33 percent this year at Sotheby’s, and Phillips sold just 51 percent of offered lots at its “New Now” auction of emerging art in New York on Monday.

The Armory Show, which opened to select guests Wednesday, is the top event at this week’s annual art bazaar, with at least nine fairs presenting hundreds of international galleries and thousands of artists. Collectors on Tuesday weren’t rushing to pull the trigger on purchases. 

“I’m just looking around,” said Stephen Schwarzman, head of Blackstone Group, as he strolled the aisles on Tuesday.

Subdued Sales

Ed Dolman, chief executive officer of Phillips, said in a Bloomberg Television interview that low interest rates pushed a massive amount of money into the art market, with prices rising 10 percent to 20 percent a year.

“It’s been a great place for people to put their money and turn over pictures. But that’s not the case any more," Dolman said Wednesday. He said discretionary sales of art could decline in the next year as collectors “sit on what they’ve got.”

At the Art Show in New York, first-day sales were subdued. In 2015, Sean Kelly gallery sold more than $1 million worth of art at the fair’s opening. On Tuesday, the gallery didn’t confirm any sales of new sculptures and works on paper by artist Rebecca Horn.

“You can say it’s a beautiful booth,” dealer Sean Kelly said.

Early sales included a 1962 painting of a yellow-faced man by Beauford Delaney, priced at $450,000, at Michael Rosenfeld Gallery. Danese/Corey gallery sold a majestic life-size sculpture of a horse by Deborah Butterfield, priced at $425,000.

Buying Opportunities

Salon 94 gallery moved seven paintings by Marilyn Minter at between $30,000 and $160,000. 11R gallery placed three works by New York artist Mika Tajima, each at $18,000. Lehmann Maupin gallery sold at least three pieces by painter Hernan Bas, priced between $30,000 and $200,000.

The Fourth of June (Eton) by Hernan Bas
The Fourth of June (Eton) by Hernan Bas
Source: Sutton PR

There were no immediate takers for a Joseph Cornell glass case priced at $3.8 million at Richard L. Feigen gallery. A 1964 painting by Pablo Picasso, priced at $4 million, was pulled at the last minute from the exhibition at Richard Gray Gallery’s booth to be shown privately to a client, said director Paul Gray.
It wasn’t sold by the end of Tuesday, he said. 

“The volatility of the equity markets seems to be giving the art community pause,” Dan Desmond, executive director of Blue Rider Group that provides investment management for collectors, said at the Art Show. “This environment is creating opportunities for patient buyers.”

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