The art market in France – 2011 overview

After posting an analysis of the Art Market Confidence Index’s performance in 2011 and before publishing an overview of the global art market in 2011, Artprice is pursuing its annual overview series with a round-up of the French auction market in 2011.

Although it is still a little early to proclaim victory, 2011 was a particularly prolific year for the global auction market and is heading towards being the all-time best-ever year for global Fine Art sales.
However, this global dynamism is only partially reflected in the figures for the French auction market. Although not as good as the 2009 record ($671 million due notably to the $ 264,9 million from the Yves St Laurent & Pierre Bergé sale) or the excellent revenue totals for 2007 and 2008 (more than $607m in 2007 followed by $525m in 2008, partly assisted by a favourable euro/dollar effect), the 2011 figures are already better than last year’s total.
By the end of 2011, the French art market should post a 5 to 7% increase in sales volumes versus 2010. Although this is a significant improvement, it is still weak compared with the 15% increase forecast for the global art market this year.

And while it will allow France to maintain a firm grip on its 4th place in terms of market share (now that the 3rd place seems irredeemably out of reach) with between 4.5% and 5% of the global art market, it is a market share that is structurally in decline versus the other major marketplaces…. In fact, the French art market is struggling to remain buoyant with an annual auction revenue of between $430m and $607m since 2006 (excluding the Bergé/YSL sale). Compared with the incredible vitality of the global art market (sales volumes up 37% between 2006 and 2010), the French market looks relatively sluggish (sales volumes only up 11% over the same period).

The top end of the market
During 2011, there were 44 million-plus results (USD) in France, 20 more than in 2010, as many as in 2007 and 8 less than in 2009. These 44 results represent 2.7% of the total global revenue generated from million-plus (USD) results at art auctions. China generated 640 more than France, and the USA 384 more.
Although France has seen a number of high-profile results towards the end of this year, its best result in Paris was a long way down the global ranking of 2011 auction results …behind 93 others hammered in New York, London, Hong Kong, Beijing and Hangzhou!
Nicolas DE STAËL’s Nu couché, which fetched a new record of €7 million, was France’s best result in 2011. The second best was hammered at Artcurial for Lyonel FEININGER’s Hafen von Swinemünde (Port de Swinemünde) which was acquired for €5m on 29 June (far behind Feininger’s €15.2m record for Jesuiten III). In total, three of the 10 best French results of the year were generated at the hotel Dassault.
With these records under their belt, Artcurial has returned to the Top 3 French auction companies alongside Christie’s (more than $77m in revenue from Fine Art auctions, but down 28 % on 2010) and Sotheby’s (more than $107m in Fine Art auction revenue).
Behind these three habitual leaders of the French Fine Art auction market, but substantially lower down the Top 10 list, there is Tajan, Cornette de St Cyr, Aguttes and the newcomer Christophe Joron-Derem Sarl, which benefited from the sale of Claude MONET’s La Promenade d’Argenteuil, un soir d’hiver for €2.25 million, three times its low estimate.

The heart of the French market: the “affordable” segment
But behind these records, the French art market is increasingly deserving its unkind epithet grenier du marché (loosely translated as “storehouse of the market”, implying that it is a good source of valuable artefacts) and… the trouble is that the storehouse has already been substantially despoiled! Artcurial, the leading French auction house (as opposed to leading auction house operating in France), is only 14th in the global ranking of auctioneers by revenue behind nine Asian companies, and Tajan, the second French auction house, is somewhere between the 40th and the 50th.
The success of the Asian auctioneers has clearly been driven by strong level of demand from an exceptionally wealthy client base. If we look at unsold rates for example, we see that Asian rates have oscillated around 22% this year versus 42% in France and a global average of 35% in 2011.
Indeed, for many years now, France has been unable to find a sustained level of demand to absorb its abundant offer. Its abundant offer is reflected in a very low price segmentation. Thus, for example, 78% of French auction results are under the $5,000 bar, i.e. nearly 18% of the total number of works sold below this threshold in the entire world. Of the 4 biggest global marketplaces (USA, UK, China and France), France is the only marketplace to have an “affordable works” rate (less than $5,000) above 65%, whereas China sells less than only 30% of its works below this threshold!

It is against this backdrop – a mainly “affordable” market, but with prestige sales several days a year – that France has finally adopted the European Services Directive. This transposition of the Services Directive into French law aims to liberalise the French auction market with the objective of regaining some of the dynamism that made it, as recently as the early 1960s, the leading marketplace for art in the world.