Roy Lichtenstein’s Nude With Joyous was the big seller at a Christie’s hybrid sale on July 10. It fetched US$421 million (S$586 million), signalling the art market is holding firm during the coronavirus pandemic.
Just about every area of personal finance has been affected by the coronavirus pandemic, including aspirational purchases such as art, cars, watches and wine.
Auctions for buying and selling many of these objects have been rendered untenable since March because of social distancing curbs. But the desire remains, with sellers looking to shed valuable items to shore up their own balance sheets, and buyers who have reserves looking to collect on the cheap.
To meet that demand, the rarefied world of the auction house has been forced online.
But auction houses are working to ensure selling their high-ticket objects don’t devolve into an eBay frenzy, where wealthy buyers are sitting around in their pyjamas stalking deals on their laptops.
To counteract that down-market feel, auctioneers have become more creative.
Sotheby’s, for one, has built a platform for its online-only auctions that prevents people from entering a bid just as the time is about to expire, a strategy known as sniping.
“If someone snipes at the last minute, the sale extends for another five minutes,” said Mr Richard Lopez, head of online sales and a senior watch specialist at Sotheby’s.
Auctions tend to be seasonal, and many are smaller now that they are online. Several annual California car auctions next month in Pebble Beach and Monterey in California are planning to present half the number of vehicles online that they did in in-person auctions last year. But because sellers may need cash during this period, there may be more deals for people with money to invest in these illiquid assets.
Sotheby’s contemporary art sale, held online at the end of June, was the first big test of virtual auctions. Some major pieces still sold for top dollar. A Francis Bacon triptych sold for nearly US$85 million (S$118 million) above its estimate. A Jean-Michel Basquiat drawing went for US$15 million.
“We’ve been lucky at Sotheby’s because with our online platform, we’ve been able to switch over with the same level of trust,” Mr Lopez said. When asked what was lost online, he responded without hesitation: “The fun.” Still, the push to move auctions online has its risks. Stories abound of buyers being duped by high-end galleries.
August would normally send some of the world’s most expensive cars to the Monterey Peninsula for the annual Pebble Beach Concours d’Elegance, where rare automobiles are parked for a day on the 18th fairway at Pebble Beach Golf Links.
That’s not happening this year. Gooding & Company and Bonhams, two auction houses with large automotive departments, will present about half the cars they would have in a live auction, and rely on video and limited in-person viewing to drum up interest. Both houses are upbeat about the online demand.
Mr David Gooding, president of his namesake company, said: “If they’re passionate about cars, they’re tapping that passion. We’re seeing demand and interest as strong as ever.”
There is far less ambivalence now than ahead of a typical live auction. Sellers really want to sell their cars, and buyers are focused on getting the car they want.
A few cars are priced in excess of US$2 million but many are in the US$50,000 to US$100,000 range, he said.
To give assurance on the cars’ condition, the auction house is holding them in a Los Angeles warehouse. Bonhams is similarly storing its cars, splitting them between Los Angeles in California and Bedford, New York, where specialists can arrange virtual or in-person viewings before the August sale.
Some of the highest-priced cars may be the easiest to sell at an online auction, said Mr Jakob Greisen, head of Bonhams’ US motoring department. The sale’s signature car is a 1934 Alfa Romeo 8C 2300 Cabriolet by Figoni, estimated to sell for as much as US$7.5 million.
What’s expensive is always relative. A US$28,000 Rolex is inexpensive compared with a million-dollar car, but there is one particular model from the iconic watchmaker that has had a star turn during the pandemic: the Rolex Daytona with a ceramic bezel.
The watch has a retail price of US$13,000 but has been selling for US$20,000 to US$30,000 in online auctions. Sotheby’s recently sold one for US$28,000. “You can buy it retail, but the wait list is two to three years,” Mr Lopez said.
Watches lend themselves to the online scrolling so many of us have been doing to pass the time. And that has pushed Sotheby’s watch department to move to weekly and monthly auctions, scrapping its previous format of semi-annual New York auctions.
Fine wine can sit in a bottle for decades and, potentially, get better. But the primary mechanism for selling first-growth wine from Bordeaux, France – the most reliably collectable region in the wine world – is to sell wine futures a few months after the wine is put into a barrel. Futures, the prices for wine that won’t arrive in buyers’ cellars for several years, have traditionally been set by working with wine brokers through a marketplace called the Place du Bordeaux.
This year, the process of tasting young wines to divine which ones will age well was disrupted because no one could travel to Bordeaux to sample the 2019 vintage.
To sell the wine, which is considered a top vintage, Bordeaux producers are discounting it heavily, said Mr Tom Gearing, chief executive and a co-founder of Cult Wines, which manages investment-grade wine. “With the uncertain economy, people are in the position to ask, ‘Do I really want to shell out money for a wine I won’t have physically for two years?'” he said.
To encourage buyers, producers, even among the top five Bordeaux houses, such as Rothschild and Margaux, have discounted this vintage as much as 25 per cent from the 2018 vintage (which is considered not as good).
As with all of these passion investments, fine wine is a deal only if you are among the lucky few who have weathered the economic crisis with disposable income and confidence in the future.
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A version of this article appeared in the print edition of The Sunday Times on July 19, 2020, with the headline ‘Auctions far from hammered’. Print Edition | Subscribe