Art market

Have the salerooms killed off London as a major player in the Asian art market?

Top dealer Giuseppe Eskenazi blames the auction houses


London has traditionally been the commercial centre for Asian art since the 1930s and before, and unquestionably still has the highest concentration of excellent dealers and superb museum collections in the West.

It is arguably no longer the centre, and in an interview in the January edition of Orientations magazine with Giuseppe Eskenazi, the preeminent London dealer in Asian art, blames the auction houses because, paradoxically, London is now a distant third behind New York and Hong Kong for Chinese art sales.

“When I was young, Christie’s and Sotheby’s in London had a sale a month of Oriental art excluding January and August and three really big sales a year in December, March-April and June-July. This went on for twenty years. Now they each only hold two a year”, Mr Eskenazi said. “From 1974 to 1988 the very top objects were still being sold in London, but this has completely stopped”, he added.

Indeed the world record price for many years was achieved at Sotheby’s London on 15 December, 1981, when lot 175, a Xuande blue and white dragon jar was purchased by the Japanese dealer Hirano, underbid by Matsuoka, for £720,000 ($1.1 million). “Chinese art is the only department where activity has been so drastically curtailed in London, and the auctions no longer attract as many dealers and collectors from abroad who might also visit the galleries”, he continued.

Since the early 1980s, the field has been dominated by Asian buyers, principally from Hong Kong, Taiwan and Singapore. To take full advantage of this market trend, the auction houses opened branches in Hong Kong (Sotheby’s in 1973, Christie’s in 1985) and held increasingly large sales there to the clear detriment of both New York, and more significantly London. In the beginning pieces were sent to be sold in Hong Kong from New York and London to build the auctions there. Since the success of the Edward T. Chow sale in Hong Kong in 1981, the prevailing opinion has been that any Chinese taste piece, especially Ming and Qing Mark and Period porcelains and jadeite carvings would bring a much higher price in Hong Kong.

According to Julian Thompson, Chairman of Sotheby’s Asia, most of the private collectors of Imperial porcelain live there so that is now the strongest market and the place where consignors would prefer their pieces to be sold. “London is an international clearing house for Asian art and has very good dealers, but few end consumers”, he commented. He maintains that now 80% of the material sold there is from local sources, and that Hong Kong sales are simply topped up with pieces from New York and London.

Richard Marchant of S. Marchant and Son, specialising in Ming and Qing porcelain and long established in London, agrees with Mr Eskenazi. “I am saddened that London has suffered by what appears to be a deliberate policy that the best material always goes to Hong Kong, but not convinced that most of the pieces which are sent to Hong Kong would not sell as well in London, with the exception of modern Chinese paintings and jadeite jewellery”, he said. “Clients can have condition reports, and Singapore buyers for example could just as well bid on the phone to London as to Hong Kong”, he added.

Colin Sheaf, Director of the Chinese Works of Art department at Christie’s in London asserts, “We make no apology for selling an important work of art in the place where it will sell the best, and that is what the vendor wants and pays us to do”. The Palmer Collection of Ming blue and white porcelain, an old British collection, was sold by Christie’s in Hong Kong in January 1989. This made the most sense, Mr Sheaf thought, as all the major pieces were bought by Asian buyers and the sale made more than it ever would have in London in his opinion.

In comparing the number of lots sold and the sales totals around the world, but particularly London and Hong Kong, it is hopelessly lopsided with London very disadvantaged. In the last two years, the largest sale in London numbered 381 lots, but most were closer to 300 lots, and the highest total was £2.2 million ($3.5 million), while in a Hong Kong sale, the average number of lots offered was closer to one thousand (excluding paintings) with totals ranging from about HK$55 million (£4.6 million, $7.3 million), to well over HK$200 million (£16.6 million, $26.6 million). The fact that corporation tax is only 17% in Hong Kong whereas it is 40% in the United Kingdom must also be a consideration.

Nonetheless several recent examples point to the paramount principle of today’s international market: if the piece is important enough, it will fetch its price irrespective of where it is sold. On 7 June 1994 at Sotheby’s London, lot 387, a very rare Yongzheng famille-rose Mark and Period bowl decorated with a prunus branch and a poem, with the very low estimate of £10,000-15,000 because it was a badly cracked and therefore kept in London, fetched £142,300. A Hong Kong collector was willing to pay this extraordinary price considering the condition.

Phillips and Bonhams do not have Hong Kong branches and are forced to sell in London, but again the right piece draws its audience. On 9 December, 1992, Bonhams sold a Xuande Mark and Period blue and white brushwasher (lot 78) for £682,000 with premium to one Japanese dealer competing against another. Giuseppe Eskenazi had bought it in the Edward T. Chow sale in Hong Kong in 1981 for HK$1.8 million, and it was stolen in 1984. It reappeared at Christie’s where it was recognised, and Lloyds, which had paid the insurance claim, consigned it to Bonhams for sale.

In the last five years there have been numerous changes in the Chinese art gallery scene in London. The venerable old houses of Bluett’s, Spark’s and Barling’s have disappeared, and Spink has been bought by Christie’s. Anthony Carter, managing director of Bluett’s and Michael Gillingham, director of Sparks, both attributed their firms’ problems to the recession rather than to a dwindling clientele, but Nicholas Grindley (Barling’s) thought that in retrospect, the lack of activity in London did prevent some sales from occurring. “London’s problems will be compounded in future by the 2.5% VAT to be imposed in May of this year on anything brought in from outside the European Union, which could discourage people from selling pieces here and will result in a further scaling back of auctions”, he said.

On the other hand, several dealers who have opened new galleries, including Mr Eskenazi, The Oriental Art Gallery, Robert Kleiner and Robert Hall (with Michael Goedhuis opening in Mount Street this month), clearly do have confidence in London’s continued importance in this field. Many of the dealers felt that it is now entirely up to them and to the museums to create events and give outstanding exhibitions to bring clients back to London. The consensus was however, that the paucity of local collectors and the decrease in the number of overseas visitors, due to the weak auctions, had affected business. Increasingly it has been necessary for many of them to rely on travel and international antique fairs to make up the difference.

Originally appeared in The Art Newspaper as 'Have the salerooms killed off London?'