Kobel's Art Weekly

Kobel's Art Weekly 52 2024

At the Annual General Meeting of Weng Fine Art AG in Düsseldorf in mid-December, Rüdiger K. Weng stated that 2024 is likely to have been the worst financial year since his company was founded. Gereon Kruse reported on the event for Boersengefluester and I for the Handelsblatt. But he sees light on the horizon for 2025. Our three-part review of the art market coverage of the past year shows a lot of shadows, but also some encouraging things.

Devorah Lauter has analysed how smaller and mid-size galleries are dealing with the current market weakness in mid-July for Artnews: “For these smaller and mid-size galleries, however, the slowdown makes the calculus around fairs trickier, particularly when you consider the overhead for a fair. As multiple dealers told ARTnews, shipping, framing, storage, and other overhead costs have risen dramatically, with [gallerist Monique] Meloche suggesting that such costs are ‘at least 50 percent higher’ than pre-Covid. Those costs are felt by collectors too, who Meloche said continue to gravitate towards paintings, due to the efficacy in those costs."

Rosalind Jana tries to explain the art world's enthusiasm for the fashion industry at ArtReview: “The artworld, too, does a fair amount of cloaking: investment and speculation and the sky-rocketing financial success of a series of ultra-contemporary artists justified by the perceived nobility of the form. Right now, this seems to have resulted in a lot of woozy abstract paintings (or worse, something described in every accompanying text as ‘abstraction meets figuration’), and perhaps a nagging sense, shared with the fashion world, of existential ennui about what it's all for - where to find the pleasure and provocation, beyond making money and being seen at the right parties. Bedfellows in their anxieties as well as their mutual admiration and need, perhaps fashion and art are not so much clasping hands but clinging to each other in the dark."

Not a good outlook for the art market: sales and profits are collapsing for the luxury groups, reports Der Aktionär: "After LVMH recently disappointed with its figures, competitor Kering is now also causing long faces. Due to the slump in consumption and reorganisation efforts at its most important brand Gucci, the group is expecting a further significant drop in profits. The Kering share price is falling sharply, dragging LVMH and Hugo Boss down with it." Meanwhile, Sotheby's is opening its first shop in Hong Kong, reports the state-owned South China Morning Post.

Munich's Galerie Thomas is threatened by insolvency, I report for the Handelsblatt. Bayerischer Rundfunk has an astonishingly similar report, right down to the wording.

Pace Gallery is parting ways with three executives, reports George Nelson at Artnews: "Gary Waterston has left the gallery, just six months after he was hired for the newly created position of executive vice president of global sales and operations. Pace's senior director, curatorial, and artist management - Sarah Levine - and curatorial director Mark Beasley have also both departed." Angelica Villa reports the dismissal of ten members of David Zwirner's online team on Artnews.

The announcement of a series about the fraudster Inigo Philbrick prompts Riah Pryor in The Art Newspaper to ponder how to prevent art criminals from capitalising on their crimes: "So, in a world where an ex-president can run for re-election in the US after a criminal conviction and art frauds can lead to a hit Netflix series, where are the boundaries between crime and compensation-and who monitors them?"

In the Handelsblatt, I report on the status of the insolvency proceedings at Galerie Thomas in Munich and options for creditors.

Zachary Small and Julia Halperin analyse in late August whether and how the bursting of the current speculative bubble differs from previous ones in the New York Times: "The art market has been experiencing a downturn for the last few years, but the slump has been particularly acute for young artists. During the early pandemic, a speculative boom driven by a misplaced belief in quick returns set in, with collectors spending $712 million at auction in 2021 on works by artists born after 1974 - a giant leap from the $259 million buyers spent just a year earlier. But from 2021 to 2023, the prices for these artists - ‘ultracontemporary’ is the industry term for them - plummeted by almost a third, according to the Artnet Price Database.’ And, as always, people rarely or never seem to learn from the mistakes of others, but at best from their own. But at least: ‘[Amani] Lewis and other artists say the experience of navigating the market gauntlet has made them stronger. [Isshaq] Ismail, for example, now sells his work exclusively through galleries."

Something is happening in Frankfurt's gallery scene, observes Christoph Schütte in early September for the FAZ: “In 2022, the Interessengemeinschaft der Galerien (IG) dissolved itself after almost 40 years. The reasons for this were not so much conflicts between the top dogs and the new wild ones or differences in terms of differentiation from non-organised colleagues or the once numerous independent spaces in Frankfurt. Above all, after Anita Beckers, Heike Strelow and Jacky Strenz no longer stood as candidates, no one from the established gallery owners wanted to wear the proverbial hat - i.e. represent the IG without a budget, so to speak, and accompany the start of the season organisationally. When more than 50 galleries and off-spaces invite you to the 30th start of the season next weekend, it seems that a lot has happened. The event, which is now accompanied by an agency, is briskly called ‘The Frankfurt Art Experience’, there are tours called ‘Walks’ in German and English and a further programme.”

Sabine Spindler reports on the Munich gallery marathon in advance in Handelsblatt: “Jahn und Jahn and Lohaus Sominsky are part of the Various Others (VO) initiative. Since 2018, the initiative has been developing cooperative concepts with galleries from other cities for the Munich Art Marathon, providing a breath of fresh air. ‘However, we do not see ourselves as competitors to Open Art Munich, the other initiative of Munich galleries and long-standing organiser of the gallery weekend,’ said VO Director Christian Ganzenberg. Which group a gallery belongs to is of secondary importance to the art flâneur. But you should pay attention to both programmes.”

I spoke to the organisers of the resurrected Gallery Weekend in Brussels for Artmagazine.

I read Artnet's annual report (PDF) for the Handelsblatt.

Polskie Radio reports on the systematic destruction of Ukrainian cultural assets by Russia: ‘According to the Ukrainian Ministry of Culture and Information Policy, by August 2024, 1,096 heritage sites and 2,024 cultural institutions have been destroyed. There are also cases of previously damaged institutions being hit again.’

For some time now, the Berlin art autumn has had a name under which the heterogeneous programme takes place, which Christian Herchenröder presents in the Handelsblatt: “The 13th 'Berlin Art Week' advertises over 300 events. It has always been a melting pot of exhibitions, gallery openings and art events, but now it has taken on a dimension that is almost impossible to grasp. Everyone is getting in on the act, from artist talks and performances to exhibition openings and guest appearances by international galleries. The programme, which is scheduled to culminate in a gallery night on 13 September 2024, ranges from exhibition openings and guest appearances by international galleries. The fifty or so core galleries that are presenting their autumn programme here are still the main attractions of this extended art weekend from 11 to 15 September.”

With Office Baroque, another prominent avant-garde gallery has failed due to the pitfalls of late capitalism. On its website, the gallery writes: “In the background of 2016, an ice age seemed to spread through the art world as the market became increasingly polarised between emerging and blue chip art. A lot of the people who were active in the spaces in between, were hit by the so-called mid level squeeze. The outlines of the current ecosystem were traced long before, but things seemed to take an irreversible turn around that time. A lack of support and regulation on all levels in the art world, ended up and continues today, to put emerging and mid-career artists and galleries, ever more at risk. Long term (shared) goals seem to have disappeared from the radar. Being signed up by a mega gallery may have become the new holy grail of careers, for artists, gallery staff and even for gallery owners. At the very heart of the system, severe misuse of power continues to accompany admission into almost every segment of the art world, both for galleries and artists. A fix-all solution for many galleries remains to expand, in the hopes of interconnecting gallery growth, with spikes in represented artists careers, often until the very point of losing.”

This is in line with a report by Alex Greenberger in Artnews: “David Lewis, a taste-making New York dealer who recently shuttered his gallery in the city, has joined Hauser & Wirth, where he will now serve as senior director.”

Hauser & Wirth has a new CEO in the person of long-standing employee Mirella Roma (partner since 2020), as reported by Daniel Cassady at Artnews: “Roma succeeds Ewan Venters who joined the gallery as CEO in 2021. Venters will remain chief executive of Artfarm, the independent hospitality group launched by gallery cofounders Iwan and Manuela Wirth in 2014, until January 2025 or a successor is named.”

At least this time it is not Germany that comes in last, but Austria. The reduction in the VAT rate on art will probably not happen there either, even if Eva Komarek at Parnass still whistles softly in the forest: “A change by the end of December 2024, before the Brussels directive and the lower tax rate in Germany come into force, seems unlikely. Austria currently has two reduced VAT rates: 10 per cent and 13 per cent. Since the directive from Brussels only allows two reduced VAT rates, except for covering basic needs, one of these two would have to be abandoned and the seven per cent would have to be introduced instead. Within Austrian politics, there are different views on the necessity of a tax reduction. At least until a new government is formed after the parliamentary elections, Austria will probably have to live with the tax disadvantage on the art market. Because nothing will happen before the election and such a niche topic is too uninteresting for the election campaign to take it on. It remains to be hoped that the new government will then show understanding for the importance of Austria as an art market place.” If a potential Chancellor Dollfuß was to put art in general, and not just patriotic art, on his agenda at all, it should be a cause for concern.

What art dealers need to bear in mind when importing art is explained by Berlin lawyer Zacharias Mawick in Weltkunst Insider (still with free registration): “Today, it is no longer enough to know only your own cultural property laws if your personal business or collecting area extends beyond the borders of your own country. If works of art or antiques of a certain value and age are to be imported or exported, legal export from the country of origin – or in the worst case, from all potential countries of origin – is increasingly becoming an issue. [...] What measures should be taken to ensure that cultural artefacts remain tradable in the future? How can problems with the relevant authorities be avoided in advance? We will see that a central tool is the thorough storage and maintenance of import and export documents, as well as all proofs of provenance, as these are playing an increasingly important role in all cultural property-related procedures.”

There has been movement in the seemingly endless discussion about a workable regulation for dealing with looted art. Christiane Fricke summarises in the Handelsblatt: “On 9 October 2024, the federal, state and local governments reached an agreement in a so-called administrative agreement to establish an arbitration court for Nazi-looted art. Unlike its predecessor, the ‘Advisory Commission’, the new ‘Court of Arbitration for Nazi-looted Art’ is to be a one-sided body, i.e. it can be called upon by only one party, and is to make legally binding decisions. This means that, for the first time in Germany, heirs of despoiled Jewish collectors will have a genuine legal claim to cultural property in public ownership that was lost as a result of persecution. [...] The arbitration award that concludes a procedure is therefore equivalent to a state court judgment. However, it precludes further proceedings, for example before state courts. Only if the gravest of errors has been made can the arbitration award be reviewed by the competent higher regional court upon application.”

How museums manage to make new acquisitions in times of empty coffers and high prices is the subject of an in-depth investigation by Ted Loos in the New York Times: “Some museums are exploring splitting the costs of a work of art with other museums and owning it jointly, part of a growing discussion about whether sole ownership really needs to be the end goal.”

Yves Bouvier, former Freeport king, owes Switzerland 712 million francs in taxes, reports Fedele Mendicino in the Tribune de Geneve. In The Art Newspaper, Kabir Jhala and Vincent Noce cover the story.

In an article in early November by Barbara Kutscher for the Handelsblatt, many galleries are accused of a lack of learning ability: ‘Even the major galleries recorded a slump in sales after the shopping frenzy during the pandemic. Marc Glimcher, president and CEO of the international Pace Gallery, put the decline at 20 to 30 per cent at Christie's ‘Art+Tech Summit’ in New York in the summer, and he added that the previous year had not gone so well either. The solution? For Jeff Poe, co-founder of the Californian gallery Blum & Poe, from which he retired last year, the solution is clear: tighten your belt. Most galleries have been immensely successful during the pandemic, to everyone's surprise. But only because expenses were eliminated, the former dealer said on the ‘Baer Faxt’ podcast. ‘Galleries have learned nothing from the pandemic. They went right back to their old ways.’

The Kulturgutschutzgesetz, which in theory is a bureaucratic monster, is in danger of being tightened in practice to such an extent that it could bring the art trade in Germany to a standstill, warns Christiane Fricke in the Handelsblatt: “The problem remains with the reversal of the burden of proof imposed on the art trade. If it is not possible to determine whether the cultural object was transferred after [recte: before] 26 April 2007, it will be assumed that it was exported thereafter and that there is a claim for restitution. The authorities can then seize the cultural object. However, such a procedure based only on a presumption would contradict the principles of the rule of law.”

The Bank of America Art Market Update sees investment opportunities in view of falling prices in the secondary market, as art and collectibles are becoming more important as an asset class in the long term: "According to the 2024 Bank of America Private Bank Study of Wealthy Americans, 56% of collectors now consider their art as a part of their wealth management strategy, including 98% of younger collectors (millennials and Gen Z), who are, at higher rates than ever before, integrating art into their charitable giving (52%), tax planning (48%) and liquidity strategy (28%)." Summaries of the report's findings (which are not particularly extensive anyway) are provided by Maxwell Rabb at Artsy and George Nelson at Artnews.

According to a study by Bain Capital and Altagamma, the luxury market will stagnate this year: ‘Global luxury spending is expected to reach nearly €1.5 trillion in 2024, remaining relatively flat compared to 2023, with an estimated growth rate between -1 and 1% year over year.’ Art lending, on the other hand, is booming, according to George Nelson at Artnews.

Christiane Fricke wonders about the future of art collecting and the traditional programme gallery when walking through Cologne galleries in the Handelsblatt: “Galleries with a permanent address that take a long-term approach to building up their artists are becoming increasingly rare. The old guard of collectors, who observed and supported their artists over long periods of time, hardly exists anymore, observe Cologne gallerists Sylvia and Thomas Rehbein. A young generation, whose passion for collecting would also be of interest to museums in the future, is not growing back or collecting ‘like weeds’. [...] It is not yet clear what should take the place of the traditional programme gallery. Because with the numerous off-spaces that have appeared on the scene in Cologne – without a permanent group of artists – the question is whether they will survive.”

I write about the reasons for Artnet's cancellation of the Annual General Meeting in the Handelsblatt. Marion Maneker writes at Puck (paywall) about the company's troubles: "Yet the stock price remains at a nine-month high, which isn't great news for the Neuendorfs, who previously enlisted passive investors to buy the company's stock at depressed prices and vote with their bloc. If the stock isn't budging after the grim financials, it means that shareholders are sticking around; they haven't given up on the company, but they may have given up on the Neuendorfs."

Leo Xu, former director of David Zwirner Hong Kong, attempts to explain the current Chinese market on Artnet: ‘There is also a shift away from young artists, which have dominated the market the past few years. Many of these works carry an exotic quality or are closely tied to personal, intimate narratives, but they often lack critical reflection on contemporary society and humanity. It feels akin to trending topics on social media. This is a global issue, but it has taken on a huge scale of consumption in Asia, which in turn has swept through Western markets. From my experience, the Western art market operates in tiers, with collectors of different ages and backgrounds having their preferences. In contrast, the Asian market is relatively new, constantly being revised and rebuilt. Many buyers frequently shift between categories—moving from antiques to contemporary Chinese art, abandoning it for Western blue-chip artists, and then spotting opportunities in young Western artists at lower price points for faster returns.’

Kabir Jhala gives a brief summary of the ending year in The Art Newspaper: “The top end of the market continued to contract this year, as trophy lots failed to return in the numbers seen during the Covid-19 pandemic or the years prior to that, while the demand for ultra-contemporary work evaporated, leaving some of the industry's biggest businesses in a bind. This was most clear at the auction houses, where sales fell for a second year in a row. At Sotheby's this came with the announcement of major staff layoffs and reports surfacing of a massive 88% drop in core earnings.”