How Coronavirus is changing the art & collectables auction market

The First Art Newspaper on the Net    Established in 1996 Wednesday, June 19, 2024

How Coronavirus is changing the art & collectables auction market
Lagonda LG6 Drophead Coupe once owned by Prince Bernard of the Netherlands, sold for £209,000 – a new online record for H&H Classics.

LONDON.- Barnebys, the biggest online search engine for art and collectables for sale at auction is logging daily changes imposed by the impact of the Coronavirus.

Pontus Silfverstolpe, one of the two Swedish founders of the business, says that it is clear that the impact of the Covid 19 virus is having a transforming, and speeding up effect on the online art auction industry.

He says: “If this virus had hit us 20 years ago it would have been game over for the industry which relied absolutely on traditional face to face auctions with a small amount of telephone bidding. But thanks to the arrival of the internet and online technology and many agile auction houses who saw early on the opportunities provided in the online sphere, the industry will both survive and thrive.”

Just before the virus struck information about online bidding activity from across the auction house sector was that on average some 50% of bidding was now coming from internet bidders working from either their mobile phone or their laptops.

Barnebys aggregates information from its 3,000 auction house and art gallery clients, hosts between 600,000 to a million objects for sale at auction each day on its website. Its core business drives buyers to auction house clients but in the past two years it has bought a valuation service – ValuemyStuff and a website building operation called Skeleton which provides a ground up offering to any auction house that wishes to move from traditional face to face auctioneering to an online operation in part, or fully. It is a 360 degree offering.

He says that the first wave of Coronavirus news had an undoubted negative impact on the market with activity on Barnebys dropping by around 30% and then, almost immediately bouncing back as people with time on their hands, locked down at home turned to their passions, be that wine collecting or art collecting or buying household objects.

Pontus says: “it was crazy. Suddenly we were busier than we have ever been with clients turning to us to seek ways of boosting buyer traffic or asking for help to develop their online systems supported by our Skeleton and ValuemyStuff services.”

One very noticeable trend is the hit that the top end of the market - Contemporary Art – has taken. “This area has been subject to a great deal of speculation – people buying for reasons of investment - which has slowed down the most,” Says Pontus.

It is interesting that some smaller more agile auction houses have got their act together better than some of the giants who are also hugely dependent on the big ticket items worth millions, namely the hard hit Contemporary Art market.

And also hurting are those many dealers and galleries and small auction houses which have not yet got an online presence. Maybe they have a website but nothing more pro-active than that and are still very dependent on face-to-face traditional auctioneering and sales.

Pontus adds: “Keeping businesses going in the pandemic crisis is important not just to their own viability and to protect their staff’s jobs, but also to the millions of consignors who rely on these sales for income or cash flow. It is part of our job to help them succeed wherever possible, especially as every job and company saved is important for the economy and reduces the burden on welfare.”

One example of a very enterprising and agile auction house, H&H Classics which specialises in classic cars and motorcycles, showed recently just how fast they could move. Their sale on March 18th at the Imperial War Museum in Duxford, Cambridgeshire, England, cleared £2m even though the venue was shut down to the public by its owners, the Ministry of Defence, just 24 hours before the sale was due to take place.

The move to a purely online sale, streamed live with an auctioneer facing a huge echoing empty aircraft hanger with hundreds of empty seats, provided a new record for the company. This was the sale for £209,000 of a 1936 Lagonda which was once owned by Prince Bernard of the Netherlands. This sort of price being orchestrated online was something the industry would have scorned 20 years ago, as simply not credible. Buyers they said wanted to see, feel and touch the product before buying.

Damian Jones, Head of Sales at H&H responded to numerous requests for advice about buying at a strange time like this with the following thoughts about the state of the market: “Today’s Bank Of England interest rate was cut from 0.75% to 0.25% plus the volatility of the world’s stock markets (down circa 20% in places) may give people more impetus to put money into an alternative asset class, what you might call an ‘investment of passion’. The collector car market has softened overall over the past few years but as the latest Knight Frank Wealth Report shows it is still performing well compared to its peers.”

“Simon Hope, Chairman of H&H, says: “On Tuesday, March 17th around lunchtime it looked as though we might just be able to hold the auction, by the skin of our teeth, but in the event it was cancelled giving us just half a day to prepare. We are used to holding very successful Auctions Online sales, having started them some 18 months ago, and are the only company to use an auctioneer to bring some life to those sales as opposed to simply having a timed auction. So that was our plan, to go online, but of course we did not have time to inform everyone that they would not be allowed into the Duxford venue – even if we knew who was actually coming!”

“And so the sale started. Lot One went for nearly double its estimate and the highest priced car to sell, a Lagonda LG6 sold for £209,000 – a new online sale record for us. Our ability to market the cars properly, allow viewing to take place before the auction by arrangement with the seller, draft in extra people to man the telephone lines and the trust in the descriptions of the cars and trust in our brand carried us through.”

Sotheby’s is another winner in this online auction revolution, recently achieving its highest ever online price for a Rolex watch which sold for £140,000.

Pontus Silfverstople of Barnebys admits that not everything is coming up roses in the online auction sector. “There are undoubted challenges, the first is the problem of finding kit to sell, supply of stock is critical. There is no point in having hungry buyers if you have nothing to sell. And the second big issue is that of shipping. Shippers have closed down and sent staff home, so there is a bottleneck in the system. People are not able to get their purchases.”

”It sounds cynical right now, but as we all know, death, divorce, disaster and debt have always been the main drivers bringing objects for sale to the auction industry.

“Because of Coronavirus people will need to get funds urgently and will once again turn to the tried and trusted auction sector to deliver that for them. And what they will find is a much more sophisticated online offering with many millions of new buyers and sellers using the systems which have proved to be so hugely valuable in this dreadful time.”

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