France on the art market
The year 2000 marks a turning point for the art market in France. World leader in this field until the 1950s, its supremacy saw itself overthrown by London and especially New York, which, for the last forty years, has taken the place once occupied by Paris. In an environment in which trade is becoming increasingly internationalised, France is reacting to defend its market by making its system more flexible, by being more assertive and by adapting to the "new economy", which has rapidly taken over the sector.
Which is what, on the contrary, the British auction houses did, thus dominating the art trade: they offered sellers top of the range valuations, guaranteed prices and were prepared to lower their commission, making up for it from the buyer.
French auctioneers, bogged down by a rigid legal framework, which prohibited them this sort of practice, were unable, nor often wished, to fight against this competition. Until now (and since Henri II) ministerial officers and holders of a monopoly over public auction sales, they are going to see reform of their status - at the moment being discussed in Parliament - to bring it in line with the commercial status of British auction houses, of which three - Sotheby’s, Christie’s and Phillips - effect almost 95% of the volume of international sales.
Facing the competition
As well as opening the French market to other dealers in the Community, as required by the European Commission, this reform is intended to give auctioneers the legal means to compete against their foreign counterparts. As for financial resources, that’s another story: although the loss of monopoly will be compensated, the amounts involved bear no relation whatsoever to those enjoyed by Christie’s and Sotheby’s.
The last few months have thus been a time of closer cooperation and mergers, bringing two French businessmen to centre stage: François Pinault, owner, through his holding company, Artemis, of Christie’s, has acquired the Parisian Piasa branch (ranking third in France), famous for having carried out the sale of Dora Maar’s estate; and Bernard Arnault, whose LVMH group is the majority shareholder in Phillips, has bought the leading French auctioneer, Tajan.
To those who are worried by the flood of British auctioneers on to the French market, and fear they will see them empty our attics, Laure de Beauvau-Craon, president of Sotheby’s France, retorts that this is already the case: in 1999, her company exported works valued at more than 137.2 million Euros1 (900 million Francs) to other countries. Christie’s will not give figures, but the value of their exports must be about the same.
The Little Dancer aged fourteen, by Edgar Degas, bought for 11.6 million Euros by François Pinault, in November 1999, at Sotheby’s.
The reform allowing them to sell in France will, on the contrary, redress the balance. Even if, since the art market is world-wide, sales in Paris will relate only to furniture, the decorative arts and books, or the primitive arts, jewellery, less highly taxed in Switzerland, will continue to be sold in Geneva and modern and contemporary paintings, also subject to deterrent levies in France, will continue to be traded in New York for the most important of them, especially contemporary art which, what is more, enjoys greater popularity with collectors there.
However, in an attempt to protect the heritage, the French Senate, on January 27, 2000, passed a draft law on the protection of national treasures in order to remedy the deficiencies of controls on the exports of works of art laid down by the law of December 1992. The validity of the export certificate has been extended: unlimited for items more than one hundred years old, the validity of the certificate for more recent works will be twenty years and renewable. In the event of dispute, two experts will be chosen to estimate the value of the item on the international market. If the State wants the work, it will have to acquire it at this price within a reasonable period.
Journalist on the daily newspaper le Monde
* 1 Euro = 6.55957 Francs.
Sale of a picture by Robert Delaunay (1885-1941) at Drouot’s, in Paris.
Great was the surprise of financial journalists when the French businessman, François Pinault was offered, for about 1 billion Euros (7 billion Francs), one of the world leaders in the art market, the British company, Christie’s. It was believed to be the infatuation of an inveterate and known collector, until his rival, Bernard Arnault, took over the Phillips company, also British, and third in its sector.
The paradox is entertaining: France, poor relation of the art market, is thus seeing two of its citizens controlling two of the three biggest dealers in the world. Both active in the luxuries industry, they understood the formidable potential - and not only in terms of publicity - represented by major art sales.
Bernard Arnault has also massively invested in companies using the Internet. This tool, which Christie’s has abandoned after a trial period but of which François Pinault’s group, PPR, with FNAC and La Redoute, is one of the pioneers in France, also fascinates Sotheby’s American strategists, which, of the three leaders, is currently most committed to auction sales on the Internet: they see it as a means of attracting more common objects than those offered in their prestige sales, and possibly as a means of drawing a new sector of the population to their auction house, computer buffs and young enthusiasts of the "new economy".
Websites:
The art market represents very little: the European Commission in Brussels estimates it to be 8 billion Euros (52.4 billion Francs) annually. Another, more reliable, study1, values it at about 2.29 billion Euros (15 billion Francs) for paintings and drawings2. In other words, slightly less than one day’s volume of trade on the French Stock Exchange - and that of Paris alone
In 1990, at the height of speculation in this sector, economist Philippe Simonnot estimated the auction market to be 7.6 billion Euros (50 billion Francs), i.e. one tenth of total trade, private sales covering the rest (today the proportion is about 3.5). And he too felt he must compare these figures with the amounts traded daily, but on Wall Street3.
France represents 5.6% of this market, against 28.75% for Great-Britain, and 49.8% for the United States.
1. On this subject see the report by Senator Yann Gaillard, le Marché de l’art français aux enchères [the French Art Sales Market up for auction], Paris, pub. Economica, 2000.
2. The two leading auction houses, Christie’s and Sotheby’s, reported a turnover of about 4.5 billion Euros (30 billion Francs) in 1999, but this total includes sales of art, furniture, jewellery, cars and property.
3. Doll’Art, by Philippe Simonnot, Paris, pub. Gallimard, 1990.
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