Christie's – Introduction and review of the legendary auction house

Recently, all the truly spectacular art purchases and sales reported in the media have been handled via art auctions.

Anyone who is inspired by these reports and also wants to buy or sell art will be interested in the industry, first and foremost in the most important auction houses, which for a very long time Christie's auction house :

Christie's auction house – a famous institution in the industry

Christie's is an art dealership that generates its revenue through private sales and its now almost legendary auction house for beautiful and rare objects. Christie's is one of the oldest auction houses in the world and currently probably the largest: In the first half of 2012, the auction house made sales of several billion US dollars, the largest sum in the company's history and also the largest sum in the entire art market.

The reason why this auction house, along with its (somewhat older) counterpart Sotheby’s, is inevitably mentioned when asked about the world’s largest auction houses, certainly has a significant impact on the company’s long history:

Christie's – a company with a centuries-old history

Christie's was founded by James Christie, about whom little more is known than that he was born in Perth, Scotland, in 1730 and, as a mature man, became a good friend of various celebrities: He is said to have been close friends with the painters Thomas Gainsborough and Sir Joshua Reynolds Thomas Chippendale, the creator of the eponymous furniture classics .

The literature on the company's history, officially disseminated by the company, describes how James Christie conducted his first sale in London on December 5, 1766; the oldest surviving auction catalogue also dates from December 1766, and this date is considered the official founding date.

However, James Christie had probably discovered his passion for holding auctions a little earlier; other sources confirm that James Christie rented auction rooms in 1762, and even newspaper advertisements from 1759 for auction days at Christie's have been found.

Exchanging rural Scotland for the already powerful financial center of London proved to be a good idea, and James Christie was soon able to establish his auction house as one of the leading art dealerships. Current events played into his hands: the French Revolution destroyed everything that had previously given France its leading position in the international art market.

Since the English had already put their monarchs in their place during the English Civil War about a century and a half earlier, English society proved to be quite “revolution-stable” at the end of the 18th century, and London, not threatened by subversive conflicts, became the new center of the international art trade.

Towards the end of the first Christie's creative period, he himself was famous for his knowledge of valuable art (even Catherine the Great trusted his expertise), and the auction rooms had long since become a well-known meeting place for dealers, collectors and celebrities of the time.

After the founder's death, his son James Christie II took over the business in 1803 and made a name for himself as an expert on Greek and Italian antiquities.

In 1823, the company moved to 8 King's Street, which remains its European headquarters to this day. After the death of James Christie II, his sons James Stirling and George Henry took over, bringing in the politician and lawyer William Manson, and after his death, his brother Edward Manson, as partners.

In 1859, following the sale of the treasures collected in an English country estate, Thomas J. Woods, the art-loving son of the estate manager, joined the company as director, and the firm was Christie, Manson & Woods .

In 1940, the company was reorganized into a limited liability company, partly to counter the still overwhelming competition from its rival Sotheby's, and Christie's began to expand beyond the borders of the United Kingdom: offices or salesrooms were opened in Rome in 1958, in Geneva in 1968 and in Tokyo in 1969.

The eternal battle with Sotheby's

In 1973, Christie's was converted into a public limited company, but remained so focused on its core European business that its first sale in the US did not take place until 1977, 13 years later than Sotheby's. Although the auction house continued to grow slowly but steadily, by 1989 Christie's only held 42 percent of the auction market.

Now, those in charge undertook some risky efforts to finally and permanently displace Sotheby's from first place: in 1990, the long-standing pricing policy was turned upside down when Christie's suddenly guaranteed a minimum price for an art collection in its May auction.

As a result, in 1996 Christie's was able to push Sotheby's into the background for the first time since 1954; unfortunately, as a result of this business policy, profits lagged far behind those of Sotheby's: Christie's made approximately $60 million in pre-tax profit from 1993 to 1997, while Sotheby's generated approximately $265 million during those years.

In the 1990s, Christie's pursued further strategies to finally overtake Sotheby's. In 1993, they paid $10.9 million for the London gallery Spink & Sons to take the lead in its specializations of "Oriental Art" and "British Painting ." In 1996, they acquired the Leger gallery for $3.3 million, merging it with Spink to form Spink-Leger. None of this proved profitable, and Spink-Leger had to close in 2002.

To follow Sotheby's lead in the real estate sector, Christie's acquired Great Estates in 1995, then the largest independent real estate brokerage network in North America, which was subsequently renamed Christie's Great Estates Inc. By the end of 1997, these efforts had presumably become too costly, and Christie's put itself up for auction. However, even after two months of negotiations with an investment firm, it was unable to secure a bid high enough to be accepted.

Video of Christie's auctions of Impressionist and Modern Art in London from February 6th to 8th – an incredible €185,057,306 was achieved

Therefore, , Groupe Artémis SA, a holding company owned by the French billionaire and art collector François Pinault , was able to acquire the first 29.1 percent of the company for around 243 million dollars; a deal was subsequently agreed for the remainder, whereby the entire company went to Artémis for a total sum of 1.2 billion dollars.

After that, there was a prolonged period without any profit reports, even though two auctions were held annually, and only after difficult adjustments to accounting rules was Christie's able to hold its first auction in Paris in 2002. The price-fixing scandal between Christie's and Sotheby's in 2000, which resulted in both auction houses having to pay a fine of over $500 million, was certainly a setback.

Auction records for Jean-Michel Basquiat, Jackson Pollock , and Roy Lichtenstein were broken at Christie's on May 15, 2013, when $495 million of contemporary art was auctioned in New York (see video).

Christie's involvement in the international art market

Like Sotheby's, Christie's has also become increasingly involved in the private art market since its acquisition by Artémis, where large sums of money are at stake: in 2006, Christie's offered the Donald Judd Foundation a sales guarantee of $21 million and subsequently displayed the artist's works for five weeks in an exhibition that later received an award for "Best Installation in an Alternative Space".

In 2007, the auction house brokered a $68 million deal that Thomas Eakins' 1875 painting "The Gross Clinic" from Jefferson Medical College to Thomas Jefferson University in Philadelphia, with the involvement of the Philadelphia Museum of Art and the Pennsylvania Academy of the Fine Arts. This work, considered one of the most important artworks of the 19th century, is now exhibited there on a rotating basis. The historically significant painting was originally slated for sale to Washington/Bentonville, but this transaction ensured its preservation for the people of Pennsylvania.

In the same year, Christie's launched an attempt to create a new platform for its private client business acquiring the Haunch of Venison gallery auction business .

This contemporary art gallery had made a name for itself in the secondary market , trading works by famous artists such as Francis Bacon , Andy Warhol , and Damien Hirst . Initially, Haunch's employees were therefore prohibited from working at Christie's auction houses to avoid potential conflicts of interest and market manipulation, but this rule was soon lifted.

Christie's initially retained the brand name, but Haunch operated as an independent company again for a time; the latest news from March 28, 2013, reports a merger of Haunch of Venison and Christie's London in the area of ​​private client trading.

The financial crisis is also hitting Christie's hard

In December 2008, the “Sunday Times” reported that Pinault was considering selling Christie's again due to his losses; rumors circulated that a number of private equity firms were interested in acquiring the auction house.

At that time, Christie's had 2,100 employees worldwide and many freelancers, an unnamed number of whom soon fell victim to the downturn in the art market during the financial crisis; later news reports indicated the elimination of 300 permanent jobs at Christie's.

A second round of job cuts began in May 2009, when annual sales fell from almost $740 million to around $250 million.

At this time, key business pillars like Guy Bennett also left Christie's, and while some collectors were prompted to sell their artwork by the economic crisis, many were unwilling to part with their treasures at bargain prices. The rumors of a sale haven't died down; in winter 2010, the Financial Times reported on the interest of a Qatari sheikh in acquiring the auction house, and by mid-2012, articles about Qatar's potential investment in Christie's were again circulating.

In 2012, as in the 1980s, Impressionist art replaced contemporary art as the leading category at Christie's, increasing sales in this area by over 50 percent in the first half of the year and giving the house the record result mentioned at the beginning of the article.

Things seem to be looking up again, and subsequent auctions have given the impression that the international art market, and with it Christie's, has even emerged stronger from the economic and financial crisis. This could be due to the numerous new clients who prefer to invest their money in tangible assets rather than opaque financial securities; in 2012, Christie's recorded almost 20 percent new bidders.

Today, Christie's is present almost everywhere in the world

The salesroom on King Street in St. James's, London, which opened in 1823, remains Christie's headquarters. A second London salesroom in South Kensington was added in 1975 and is now one of the world's most active auction venues.

In 1977, Christie's opened a branch with a huge sales area on Park Avenue in New York ; when that became too small, Christie's signed a 30-year lease in 1997 for an even larger area in Rockefeller Center.

In 1996, the company purchased a townhouse on East 59th Street in Manhattan, providing experts with a private gallery to showcase artworks to their clients and negotiate lucrative deals in complete privacy. A salesroom in Beverly Hills, Los Angeles, was added in 1997, followed in 2001 by Christie's East in New York, a salesroom for lower-priced items located on East 67th Street.

In January 2009, Christie's already operated 85 offices in 43 countries , though not all of them had retail spaces. The list includes New York City, Los Angeles, Houston, Mexico City, Paris, Geneva, Amsterdam, Moscow, Vienna, Berlin, Rome, Milan, Madrid, Buenos Aires, Singapore, Bangkok, Tel Aviv, Dubai, and offices in the art centers of South Korea, Japan, China, Australia, and Hong Kong.

Is Christie's the right auction house for you?

So, is Christie's the right choice if you're planning to part with a work of art? The history of the house clearly illustrates what exactly establishes the reputation of an outstanding auction house: knowledge, knowledge, and even more knowledge about art.

During the times when Christie's management relied more on business acumen than on artistic expertise, profits were also at risk.

Once the focus returned to the old style of connoisseurship, the house's success story continued: On May 5, 2010, Christie's was able to sell Picasso's "Nude, Green Leaves and Bust" for a price of 106 million dollars, making the painting probably still the fifth most expensive work of art ever sold.

However, Christie's operates at a level that doesn't necessarily make it the ideal choice for small sales, and the commissions shouldn't be underestimated . Currently, in 2013, you pay 25 percent on the first $75,000, 20 percent for the price between $75,001 and $1.5 million, and 12 percent on anything above that. So, a typical "roaring stag" probably won't generate much interest at Christie's.

However, if you want to sell a previously unrecognized treasure, you might be better off at Christie's than the lady who wanted to sell her inherited Persian rug at a regional auction house in autumn 2009: It was estimated at 900 euros by the regional auctioneer, fetched 19,700 euros at the regional auction – and was sold at Christie's in London in spring 2010 for the record sum of 7.2 million euros.

It is a 17th-century Persian carpet, which the auctioneer of the small house did not recognize, and according to the subsequent court ruling, was not required to recognize; you would probably have had a better chance if it had been examined by Christie's.

This little story also teaches something that basically applies to every sale via an auction house:

Ignorance sometimes protects against punishment, at least for the wrong expert, and the customer is wise to seek advice from several experts in case of doubt.