ARTiculated

Why Provenance is Paramount

As the holiday season approaches with calendars full of significant auctions and art fairs, you’re probably finding your inbox filled with emails reflecting on the sales trends expected to shape the market in the coming year. And while the UBS 2023 Global Wealth Report, ARTnews, and The Art Newspaper (to name a few) provide exceptional insights into the year ahead, we at Art Peritus wanted to focus on something more evergreen: Provenance, an important element that can have a profound impact on an item’s value.

When it comes to acquiring fine art, antiques and collectibles, understanding the nuances of quality, age, historical values, craftsmanship, and condition is vital. However, a piece’s provenance – its history of ownership – plays a pivotal role in determining its value and today in determining how it is presented for sale.

How Provenance Can Push Sales Sky High

One always expects a painting by Pablo Picasso to sell well at auction, but sometimes a painting’s provenance helps push it into stratospheric heights. Case in point is the artist’s painting “Femme à la Montre,” 1932 that just sold at Sotheby’s for close to $140 million dollars.

Beyond Picasso’s renown, the painting’s value was elevated by its prestigious history. It changed ownership only three times, notably passing from the artist into the hands of Galerie Beyeler, then subsequently to Pace Gallery, and finally into the renowned collection of Emily Fischer Landau. The fact that it had not been available for sale in fifty-five years, coupled with its stellar provenance, contributed to its record-breaking success.

Group Consignor Sales vs. Single Owner Sales

Auction houses have traditionally promoted single owner and celebrity sales, leveraging the owner’s name and fame to boost both interest and competition. Notably, the past couple years have witnessed a record number of single owner sales, accounting for almost a third of total sales. This includes celebrity memorabilia sales from Freddie Mercury, Barbara Walters, and Elton John, as well as exceptional private art and antique collections such as the Macklowe Collection, the collection of Paul G. Allen, and the Ann and Gordon Getty Collection.

While the focus on single-owner collections is not a new one, the provenance reflected in these sales is what appears to keep this segment of the market afloat following the antiques and traditional art market’s considerable downturn since the economic crisis of 2008/9.

Certainly, quality works from important collections still command high prices, yet most middle-market works are performing at much lower levels.

In the past, multi-consignor sales of ‘important’ works, divided by category, were offered several times a year. Today, the leading houses have combined these works into ‘Collector’ sales which used to be reserved for secondary auction houses.

To a lesser effect, this even holds true for a single owner collection that is sold via several sales. Usually, selected highlights are offered in a live auction setting, while the bulk is offered in multiple online sales with high-lot counts.

The Value of Renown

Last year, Art Peritus had the honor of appraising over 1,200 works in the Getty collection for IRS charitable contribution purposes (we are grateful to the family office for allowing us to break confidentiality regarding our involvement for this article). The vast and eclectic Getty collection was divided as described above into three tranches, categorized by residence and sold over a period of twelve months.

One of the top lots of furniture in the last live sale from Wheatland (an exquisite George III Ebony and Chinese reverse painted breakfront bookcase circa 1760) sold for more than double the low estimate at $750,000. Yet, this same lot may not have fared as well against some of the other more historically important works offered in the first live evening sale (had it been offered for sale there). Furthermore, the middle and lower-market works offered online in the first tranche of sales performed much better on average than those in the second and third groupings. This is likely a result of the dissipation of the original hype from the ‘once in a lifetime’ sales event given they were the last of many of sales over 12 months.

Provenance in the Long-Term

Once these single-owner sales events are over, the buyer then needs to ask themselves, what is the current and long-term value of the works they purchased?

We once performed an insurance appraisal of a broken vase. The pattern was quite recognizable and regularly traded at about $200. However, this specific vase was acquired through the Estate of Jacqueline Kennedy Onassis, at Sotheby’s auction in 1996 for over $80,000. This sale was so popular that Sotheby’s had to create a lottery for tickets to the viewing for those looking to acquire almost anything from the legendary family.

When it came to appraising the piece, the insured had luckily scheduled the work at the purchase price and was therefore covered for that amount. However, the true value of that vase was only $80,000 on the night of the auction given all the bidders in the room.

Auctions require at least 2 buyers to bid-up each other to a final successful sale price. When there are more than 2 buyers, let alone the numbers that attended the Jackie O sale, the true value of the object becomes irrelevant.

If that same vase were to be offered today (undamaged) in a group consigner auction, even with the Jackie O provenance, it would undoubtedly sell for only a few bid increments more than an identical vase without the provenance. But it would in no way be able to bring $80,000 again given the significantly smaller pool of bidders that would even be aware of the sale occurring.

Provenance and Exhibition History

Another aspect of provenance to consider is an item’s history of exhibition. For example, an exceptional porcelain footed bowl by Austrian artist Lucie Rae recently sold at Phillips, UK, for a staggering £330,200 (approximately $401,292 USD) setting a record for the artist. Despite the artist’s growing market and popularity, the piece’s strong provenance and international exhibition history significantly contributed to its value. That being said, the impact of that sale result, will have minimal effect on other works by Rie that lack the same provenance and exhibition factors, making this result an outlier.

More than Just a Piece

Provenance is not just about who owned a piece; it’s about the story it carries. Whether it’s a Picasso painting that has only changed hands a few times or a bowl setting a record at auction, the history matters to buyers.

Provenance isn’t a footnote; it’s a key player shaping the value and significance of artworks. In a market that’s always changing, provenance acts as a reliable guide, helping buyers and sellers navigate through the complexities to find pieces that carry not just artistic merit but also a rich history.