Christie's CEO, Guillaume Cerutti
A few weeks before the Rockefeller Collection auction in New York – set to be one of the year’s most memorable events for the art market – Gulf Business sat down with the CEO of Christie’s, Guillaume Cerutti to discuss market trends, the business of art, and how the world’s oldest auction house is embracing digital.
You had an exceptional year in 2017 – 26 per cent general growth and 68 per cent in the Americas.
“It was a reflection of the market, and of course the Da Vinci (Salvator Mundi – hanging in the Louvre Abu Dhabi) was the most representative sale. But as a whole, the market was stronger in 2017 in almost all categories. It is true the Da Vinci helped, but even without the Salvator Mundi sale, it would have been a very good year.”
What makes the auction market and the art market in general seemingly bullet-proofed against recessions or economic fluctuations?
“It would be a mistake to think that the art market is protected against economic fluctuations. For example, 10 years ago, the market went into a recession. It is a market like any other with cycles and very diversified. It’s made by many markets and each one very different from the other. That said, the last decade has been underpinned by the fact that there is more wealth in the world and more collectors; there has been a major change in the art market in the last decade or the last 20 years. And the fact that this market, which was very much a western market focused on America and Europe, has become a truly global market with collectors from the Middle East, Asia and other parts of the world. This fact probably drove the market to a different level.”
In the last couple of years, we’ve seen a slowdown in the luxury sector, with overstocking, online migration and so on. In your business, where do you think the cycle is right now?
“In the luxury market – and we know this well because our sister company is the Kering Group – we couldn’t say there’s a slowdown because brands like Gucci, Balenciaga or Saint Laurent have experienced growth that we would love to have in our market.
But coming back to the art market, one should look at it as being made of several parts. It’s true that if you take the categories that are related – let’s say 20th Century and contemporary art – they have been extremely strong over recent years. And why? Probably because there is a shift in taste, but also the two have been linked because there are so many new collectors in the market and their primary point of entry to the art market is very often contemporary art, modern art or categories linked to these. For instance, photo, design, or luxury.
All these categories have been very strong over the last years, more than the classic categories like old master’s paintings, decorative arts, and antiquities, which have not declined in value, but maybe the number of collectors is not as strong as on other fields.
That’s the picture we have at the moment – a market that is very different from one category to the other. We are never at the same moment on the cycles of the different markets. Contemporary art sometimes can experience corrections because it has been so strong and sometimes it has to go on different stages, have a plateau and come back. The cycle here sometimes goes very quickly, while in other fields like decorative arts we have a different challenge.
We try to support, to develop the rise of new collectors. We experiment with new sales formats, we are exploring online sales and it’s a different challenge. And that’s key for us. We are an industry, and the art market is set to be an industry, but the reality is that we are craftsmen. We deal with individual collectors selling unique objects and each category is different from the other; each object is different from the other. We are selling unique objects, we are not manufacturing. We are in an activity that has been the same for many years and the market has changed, but the relationship with the client and with the object remains the same. That’s the magic of what we do and at the same time that’s the challenge because you reinvent yourself every day. We are not manufacturing or creating a product, we are selling art based on emotion and passion to collectors and that’s a very special thing.”
Do you think there’s been a change in the art fairs dynamics? There used to be a very established art fair circuit and now we can see different independent fairs across the globe that bring a different kind of client to this environment.
“That’s a reflection of the world in which we are and that’s also true for auction houses in a way. You have galleries, fairs and auction houses that are truly international, present in the main hubs in the world and they are run like real corporations and playing at an international level.
On the other side, the market still has a very important place for niche business – smaller companies working sometimes with emerging artists and playing a role that is absolutely necessary and essential for the art market. That’s why we are seeing this situation where we have major fairs and several satellite activities around them.
Besides this we have smaller fairs with different price points, a different type of artist and a different type of collector. Very often the point of entry for the collectors is more modest and the two aspects of this are essential. Recently I had a meeting with a great woman, Touria El Glaoui, who is in charge of this beautiful African art fair, 1-54, in London in October, another one in May in New York, and very recently in Marrakesh. It is a smaller fair, but in a very relevant field for the market and doing a beautiful work. Of course, if you take a bigger fair like Art Basel, it’s a giant, but I have equal respect for the two of them.
We are all in the same industry and of course the price or the value of the items are different but it is the same relationship: art and collectors. There is room and an absolute necessity for initiatives of different sizes. I would not like to have a market where you only have Gagosian, Christie’s and Art Basel. That’s not what we want. I have enormous respect for the galleries and for the fairs. We are competitors sometimes but primarily we are partners.”
You have a very dynamic digital platform, you are generating your own content and you’re doing online only sales too. How do you see the evolution of this side of the business and the platform?
“It is still a learning curve. A few years ago, you would probably have asked the question: ‘will the online sales disrupt the art market and will digital become the new business model for the art market?’ A few years ago there were so many companies and initiatives in the digital space selling art and being extremely creative because they were looking at this market with the eyes of pure players. Meanwhile, traditional auction houses like Christie’s or Sotheby’s were building their model with the eyes of auctioneers and, as we know, people that like to buy online want the type of experience they are used to online, like Amazon where you buy with one click and you can return the product if you’re not happy.
It’s not exactly the same world; being auctioneers for 250 years we have our particular habits and traditions. A few years ago the question was if one model would overcome the other, but we have seen that this is not a relevant question. It is clear that digital sales are another channel that reinforces what we do because the main aspect of online sales for us is that it brings new customers. That’s our focus now.
It’s not about the revenue because it will not transform our world for now. For Christie’s it’s about 1 per cent of our revenue, but for bringing new collectors it is absolutely crucial. It represents today as much as 35 per cent of new buyers. So we are considering now what we do the digital space. We are seeing this channel as relevant for certain type of sales and categories like luxury handbags, watches, photo, ceramics or some of the most surprising fields like Japanese art , for instance. In these fields, online sales sometimes represent more than 10 per cent or close to 20 per cent of the whole category. The main aspect, besides some categories, is not incremental revenue but incremental new collectors.”
The composition of your client base is changing with territorial diversification and emerging markets. How do you define your clients now?
“We permanently try to expand our client base, especially on the buyer side, and usually we know pretty well our client base on the seller side because we have known the collectors for a long time.
We are trying to focus on expanding the buyers’ base. We are looking geographically – Asia, Middle East, and Latin America. In all of these territories there were collectors in the past but now there are more and more, and we are just tapping into the potential reservoir of collectors there. Especially in China the volume is really big.
We are also looking to our client base in terms of age, and the way we present ourselves to our clients is key to getting new and younger collectors. Just to give an example, the online sales are important and the way we are using our website and social media. We also need to make our exhibitions more attractive and less intimidating. Sometimes people, particularly younger people, don’t even know that they can come to our exhibitions for free. We are a bit intimidating. Recently in New York and London we have had once-a- month late openings called ‘Lates’ where we try to engage with a different category of visitor and do so in a different way. We perform mock auctions, we give them the opportunity to manipulate an object with a specialist, and we try to make ourselves more approachable. That’s a challenge.”
Talking about the GCC market, what opportunities do you see here?
“For me this is clearly one of the most exciting territories in the world for our industry. There are real collectors and when we have sales here, they work really well. We have been present in the region through our Dubai office for more than 10 years now. Adding to this, there are so many new initiatives like Dubai Art, Abu Dhabi Art, and all the initiatives linked to the market in the region in Sharjah and in Jeddah. Momentum is building.
The institutional aspect with the Louvre Abu Dhabi, the initiatives that have been announced by Saudi around Vision 2030 – which has a great component in culture and art – add something to the picture as well because it proves that the region as a whole is considering art and culture as an asset for the future. Look at the Louvre Abu Dhabi buying the Da Vinci. It’s a proof that they want to invest in a strong image to attract for culture.
That’s the first aspect of this situation. The other aspect is that the average age in the region is very young and I feel that the appetite for art and culture, the curiosity around this is part of the ambition of this generation and we want to be present at this moment. We can bring something here in terms of education, in terms of collecting. It’s such an exciting place. The Louvre Abu Dhabi is a game changer. We are very proud to be present and to have been the first auction house in the region.”
What are your expectations for the Rockefeller auction?
“I think it’s really one of these defining moments for collectors and for the art market as well. All the stars are aligned and it’s a beautiful collection with real masterpieces with some museum quality paintings from Picasso, Matisse, and Monet. The small Gaugin is absolutely beautiful too. This is a collection that is impressive by its diversity. The number of items in the collection is around 1,800 – 2,000, spanning from many different categories from decorative arts to modern and American art, so it’s a once in a lifetime opportunity.
It’s also interesting from another point of view because, while we will sell part of this collection through live sales, a very strong component of the sale will be sold online – especially decorative arts. It will be very interesting to observe the energy that we can generate on the online channel.
So, for all these different reasons we think it will be a game changer. What we feel at the moment after having exhibited the major pieces of the collection in Asia, London, Paris, Shanghai and Los Angeles before the New York auction in May, the reception from the audience has been very encouraging. It’s a good test for the market to prove that at this level of quality and of provenance, the demand is really global.
And it’s not only about figures – it’s also a collection that will be remembered because the proceeds will be given to charity.”
Is there any niche that represents an opportunity today?
“We are continuously exploring and watching the market. The recent addition to our sales in the luxury category has been handbags and it’s a field that works really well. We are not selling African art in auctions but we are following its progress closely. We will have a sell of pre-Columbian art soon, too. We try to be present in every category where we can find potential collectors. It its our duty and responsibility at Christie’s, as the oldest auction house, to be as diverse as possible.”