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Bidding on a Comeback
By Nicholas Powell

After ending a centuries-old auction monopoly, Paris is poised to become a major art market capital.

Paris has long been a paradise for art lovers, with its famous museums, top-notch art galleries and tony antique shops, not to mention sophisticated distractions ranging from opera and ballet to fine dining. One thing, however, has been sorely missing: the kind of dynamic, competitive auction scene that elsewhere in the world stimulates local art markets and draws big-time collectors.
    Finally, that is changing. Last year marked the end of a monopoly established four centuries ago (by a royal edict of Henri II in 1556, to be precise) restricting auction sales to French nationals. Christie’s and Sotheby’s—aka the “Big Two”—lost no time in moving into this long-coveted venue, and Paris now appears set to rival London as the art market capital of Europe.
    It took more than a decade of intense lobbying by EU officials to pry open the French market to EU and Swiss auctioneers, but the French Parliament finally passed the new legislation on July 10, 2000. And not a moment too soon. In the early 1950s, France’s biggest auctioneer, Etienne Ader, sold twice as much art as Christie’s and Sotheby’s combined. Forty years later, French auctioneers as a whole were selling only a fraction of the art passing through their rivals’ hands.
    Auctioneering in France had simply not evolved with the times. Prior to the recent reform, all auctions were the exclusive domain of 458 commissaires-priseurs, who were governed by an array of arcane rules and regulations. Before raising a gavel, they had to earn degrees in law and art history, be sworn in by an official representative of the Ministry of Justice and purchase a business or a share in a business from a retiring or deceased commissaire-priseur. Yet other regulations stipulated that they could not engage in any additional commercial activity, receive outside capital investment or organize sales anywhere in France besides their hometown. In short, it was a corporatist, protectionist environment, one increasingly out of step with market realities.
    Across the Channel, meanwhile, Sotheby’s and Christie’s, founded in 1744 and 1766 respectively, were aggressively adopting modern business tactics. Unlike their French colleagues, they courted new clients, invested in advertising and hired in-house specialists for various departments, such as Old Masters, Impressionism and so on. They also diversified, moving into real estate and setting up operations in the United States, Switzerland and Italy.
    They may not have been allowed to take their business to France, but that didn’t mean France couldn’t take its business to them. Aware that the British auction houses could sell items in whatever market would fetch the most, savvy French sellers began packing up their art and collectibles for sale abroad. An added incentive was that Christie’s and Sotheby’s would sometimes guarantee sellers a certain price or would cut their commission—practices forbidden by French law.
    The result was that by 1998, art auction sales in France totalled ¤1 billion, compared with ¤4.2 billion in the U.S. and ¤2.4 billion in the UK. Equally disturbing was the fact that the following year, Sotheby’s sold more than ¤152 million in art exported from France; Christie’s is believed to have sold even more. (Any art object less than 50 years old can be freely exported; older items over a certain value require an export certificate, but they are rarely withheld.)
    With the new reforms in place, however, much less French art is expected to leave the country. At the same time, the international reputations of Sotheby’s and Christie’s will likely draw more foreign buyers to France. The potential gains for France are evident—not only for the auction companies but for the State, in terms of taxes, and for other professionals, such as printers and shipping companies, who play a vital role in the organization of any sale.

On November 29, 2001, Sotheby’s became the first foreign firm to wield the gavel in France, with a sale of books belonging to Belgian collector Charles Hayoit. The mood was festive as international dealers, celebrities and media filed into the stately Galerie Charpentier, across from the Elysée Palace, for the historic event. The firm’s French director, Laure de Beauvau-Craon, opened the proceedings with a brief speech after which she was offered the first lot—a lavishly bound edition of Gabriele d’Annunzio’s Il Fuoco—in recognition of her formidable lobbying efforts in favor of the auction market reforms. After a round of enthusiastic applause, the room got down to business, placing bids totalling ¤3.9 million—handily meeting expectations.
    A week later, Christie’s followed suit with a spectacular sale in its plush new avenue Matignon headquarters. On the block was the collection of Charles-Otto Zieseniss, a well-known figure in the Parisian art world. Items included furniture, paintings and sculpture from the 17th and 18th centuries and the Napoleonic period—an eclectic stylistic mix typical of “le goût français.” Under the watchful eye of Christie’s majority shareholder, French multimillionaire businessman François Pinault, Parisian auctioneers François de Ricqlès (appointed vice chairman of Christie’s France this past January) and Cécile Verdier took turns leading the bidding, which brought in ¤2.7 million. All in all it was a decidedly French affair, dispelling widespread fears of an “invasion of Anglo-Saxon working methods” and lending a nice irony to the fact that it took place 235 years to the day after James Christie held his first auction in London.
    Six months after the excitement of those inaugural events, both houses remain convinced that Paris will indeed become a major art market capital. Encouraging signs include Christie’s March 21 sale of two collections of Old Master drawings, a specialty in which Paris is particularly strong. One, belonging to Pierre Decourcelle, sold for ¤1.5 million—50 percent more than the pre-sale estimate. And among the lots, a drawing by 18th-century French artist Hubert Robert established a world record, at ¤534,000. The collection of Pierre de Charmant, meanwhile, raised ¤2.6 million. Had the art market reform not been in force, both collections would have been exported for auction outside France.
    “Now there’s a buzz in Paris—Europeans and Americans as well as French collectors want to buy here,” comments François Curiel, Christie’s European director. “We had initially planned to hold 22 sales in 2002. But the positive results of our first auctions, the appointment of François de Ricqlès and Christie’s reputation for professionalism have made it possible to schedule 35.” Eventually, Curiel anticipates 40 to 50 annual sales in Paris along with additional auctions in the provinces.
    Sotheby’s, too, is pleased with its foray into the French art market. “Our initial experiences have been fascinating,” comments Beauvau-Craon, noting that some of Sotheby’s sales have drawn a predominantly French audience, while others have attracted important U.S. dealers from the East and West coasts. “Paris has more than fulfilled our hopes,” she says. “Sales have reached our high estimates and sometimes have even surpassed them. We are delighted.”
    Like arch-rival Christie’s, Sotheby’s will concentrate on areas in which the French market has expertise, goods to sell and collectors to buy them. Industry experts expect Paris to become the favored international venue for 18th- to 20th-century decorative arts, paintings and sculpture, jewelry, books and manuscripts, Asian art, tribal art, photography, porcelain and automobiles. Both houses, however, will continue to sell major Impressionist and Modern paintings in New York, the world center for that particular market, and important pieces of jewelry in Switzerland, where taxes are lower.
    Curiel attributes France’s rich potential to its many collectors and art market professionals, who form an excellent complement to Christie’s international networks and marketing skills. Its development may be hampered, however, by some lingering handicaps. These include a 5.5 percent VAT on works of art imported from outside the EU (no equivalent tax exists in the U.S.), the droit de suite (a .25 to 4 percent royalty tax levied on sales of works by living artists or artists dead within the last 70 years), and “general administrative difficulties.” Among the latter is the French regulation, more binding than in other countries, that a seller must wait a fortnight before trying to sell an item that failed to find a bidder in a previous auction, and that the price must be lower than the last bid.

At first glance, the arrival of the big two doesn’t seem to have made much of an impact across town at the Hôtel Drouot, where most of Paris’s 106 auctioneers—who work in no fewer than 70 separate firms—hold their sales. The renovated building opened in 1980, but salesrooms have occupied the corner of rue Drouot and rue Rossini in the 9th arrondissement since 1852. Every day, as many as 6,000 people—private collectors, dealers, brocanteurs from the huge Saint-Ouen flea market, plus international buyers from Italy, the UK and the U.S.—flock to Drouot’s 16 salesrooms, bidding on everything from ¤100 armchairs to the guéridon table by Thomire and Daguerre, circa 1788-1790, that recently went for more than ¤3.2 million.
    Some 3,000 sales are held here annually, but in contrast to the sleek efficiency of Christie’s and Sotheby’s, the atmosphere is relatively informal, with crowds sometimes spilling into the corridors and elbowing their way into the rooms to place bids. Adding to the excitement is that amid the jumble of barely sorted estates and poorly prepared catalogues, buyers have been known to find bargains and even make significant discoveries.
    “Drouot” is also the name of the umbrella organization in which all Paris auctioneers own shares and pool resources for such purposes as public relations and advertising. In 2001, their combined sales totaled a healthy ¤687 million; however, intense competition from Sotheby’s and Christie’s means that this picturesque world will, sooner or later, have to change in order to survive. For buyers, this could mean more efficiently organized sales, catalogues printed farther in advance, better customer service and bigger selections. What it will mean for the various auction houses is not yet clear.
    Already, some have forged strategic alliances or have accepted substantial outside capital investment—a practice that became legal only with the reform. One of these is Francis Briest, Paris’s leading auctioneer in Modern and contemporary art. He recently struck up a partnership with an organizer of trade fairs and an art gallery. A cash infusion from Dassault, the aeronautics company, made it possible for them to create Artcurial-Briest, a firm that now organizes trade fairs, auctions and the sale of art objects at the Hôtel Dassault, a magnificent 19th-century townhouse on the Champs-Elysées. The additional capital and exposure should be a boon to all the businesses involved.
    Other firms have turned to larger houses to obtain both deeper pockets and access to foreign markets. In 2000, for example, France’s largest auction company, Etude Tajan, became part of the French luxury group LVMH, which also owns the British auction house Phillips. Dating back to the 1970s, Tajan specializes in all manner of art, from Islamic to European Renaissance, jewelry and Modern painting. “Sotheby’s and Christie’s will clearly increase competition,” comments executive director Jacques Tajan. “But I believe that we will remain prosperous because we are the best firm. I’ve built this business over the past 40 years, and I intend to carry on working as before.” A merger with Phillips is not envisaged, although cooperation between the two houses will continue, with Phillips selling some pieces for Tajan outside of France and vice versa.
    By far the most radical initiative to date, however, came from millionaire Pierre Bergé, an avid art collector and director of Yves Saint Laurent Inc. Earlier this year, he made a bid to acquire a majority of shares in Drouot—his plan being to federate Paris’s fiercely individualistic auctioneers into a single body, with himself at the head. Talks failed, though, leaving Drouot to be wooed by both the investment arm of the British bank Barclays and the Dutch bank ABN Amro. “It’s all well and good, these people putting in unsolicited bids,” commented Drouot chairman, auctioneer Dominique Ribeyre, this past April. “But the bottom line is simply that we’re not up for sale!”
    A month later, Drouot’s commissaires-priseurs voted in favor of an eventual buy-out by an outside agent. Lawyers are now scrambling to sort out such issues as whether the various firms can be sold individually or only as a unit. Prospective buyers, meanwhile, are engaged in predictable posturing and feigning hard-to-get. From the looks of things, the bidding has only just begun....s






Photos: Jean-Bernard Vernier, Fabien Estivals



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