Art brings hope to South Africa in troubled times

Maggie Laubser’s Birds and Boats is a signed oil on canvas laid down on board measuring 15½ x 19½in (39.5 x 49.5cm), which sold for R1.3m hammer – around £59,000 – against an estimate of R700,000-900,000 at Strauss & Co on March 14.

Maggie Laubser’s Birds and Boats is a signed oil on canvas laid down on board measuring 15½ x 19½in (39.5 x 49.5cm), which sold for R1.3m hammer – around £59,000 – against an estimate of R700,000-900,000 at Strauss & Co on March 14.

The art market is a beacon of hope in these troubled times for South Africa, but those who want to be part of the success story need to prepare now

One moment, it was very much a man’s world, the next it is women coming to the fore in the South African art market.

This is the result of the death on Christmas Day of Stephan Welz, the colossus of the country’s art market for the past 30 years and more, and the passing of the baton to the new joint managing directors at Strauss & Co, the country’s leading auction house, Bina Genovese and Vanessa Phillips. Add to their skills, contacts and experience the talents of fine art specialists Ann Palmer and Emma Bedford, and the future vision rests very much on the shoulders of the women in the firm chaired by Elisabeth Bradley.

But back to Welz the man for a moment.

The dominant force for so many years in a way that no other individual can claim to have been in any other art market across the globe, his name added lustre to the works he offered for sale in a way that no one else has ever been able to imitate. The top consignors to auction looked for his personal touch as the magic ingredient, as so often it proved to be.

Such was his competitive spirit that despite ongoing health issues he never lost his edge, even taking R8.5m (£393,520) for the oil and gesso work The Creation of Adam I (1968) by Alexis Preller, the rising star of South African art, in Johannesburg on November 9.

So it was no surprise that the man Strauss & Co described as their “living archive” had two memorial services – one in Johannesburg, the other in Cape Town – and that just about the whole of the South African art market turned out to pay their respects.

Generational change in South Africa’s art scene

Welz’s passing marks not just the end of an era in the terms of his influence. It comes at a time of huge change in the South African art scene as the leading lights of the older generation give way to the new. With that change comes a whole new approach to art and antiques and the way they are marketed. And it all comes as the rand sinks to a new low against sterling amid political uncertainty and the shadow of recession. Five years ago the exchange rate was around 10 rand to the pound; now its sits at around 23.

The mood on the street is negative, as those I talked to in Cape Town and beyond told me at the beginning of February. But strangely, this is not reflected in the art market, where the trade, represented by the South African Antique, Art & Design Association (SAADA) have boosted membership by bringing in the pick of the Contemporary art dealerships to their Cape Town fair with a view to permanent membership of the association.

Having rebranded the association itself in 2013, they moved the fair, now called the SAADA Expo, to The Lookout in the V&A Waterfront last year and packed it out for 2016’s event from February 11-13, no mean feat bearing in mind that it is a considerably larger space than the old venue in the Botanical Gardens.

This was a shrewd move, because the Expo now finds itself right in the centre of the tourist trail for cash-rich evening visitors, who would only be attracted to the botanical gardens during daylight hours.

In turn, the blending of antiques with Contemporary art, and the new policy of marketing traditional objects as pieces of design and sculpture is helping to attract a new and younger domestic audience.

For the Contemporary art galleries, the endorsement of the SAADA brand sets them apart from the mass of other galleries that wouldn’t get past the vetting committee, while the new players help expand the reach and influence of the traditional SAADA membership.

Cape Town and Johannesburg trade adapting their approach

“I no longer market myself as a silver dealer; I sell sculptural artefacts that just happen to be in the form of silver,” says Jeremy Astfalck, former SAADA chairman and owner of The Old Corkscrew, who is the one South African dealer who regularly stands at British fairs (Olympia, LAPADA and the NEC).

“Alongside the Contemporary art this is definitely attracting a younger crowd.”

Some believe that it may also be showing signs of crossing the colour bar. And this is the holy grail for the art market in South Africa: attracting the interest and engagement of the newly prosperous black middle classes who simply do not relate to the traditional collecting fields in South Africa, much of it based on colonial history.

Astfalck, a huge admirer of how his successor at SAADA, Paul Mkrusic, has moved things on, is adamant that taking a new and dynamic approach does not mean compromising where it matters.

“The quality still has to be there for art and objects, including their history.”

He is also finding that his trips to stand at fairs in the UK pay off back home, where contacts he has made turn up at his Franschhoek gallery to make the most of the fabulous exchange rate.

These ‘swallows’, as they are known, because they fly south for winter, have been a staple of the market for years. The trade members among them, from the US, UK and Europe, come to snap up the best of what remains from old family collections for resale at a decent mark-up back home. Although some market watchers, like retired auctioneer Charles Rudd, believe that most of the European heirlooms have already been flushed out from colonial settler families, they still see treasures emerging that make the trip more than worthwhile.

Having closed his own Cape Town auction house in November, Rudd is still very active as an independent valuer and appraiser. Reflecting on the generational shift in the market, he is wistful about the gradual disappearance of the expertise in traditional collecting fields, but says South Africa still has a lot to offer here and believes that many European dealers and collectors are still missing out.

Weak rand attracting buyers to the Cape

“As far as the antiques side is concerned, there are still strong buyers and sellers in the traditional market and I would encourage the international trade to come down,” he says, noting the high level of fresh-to-market items available.

He acknowledges the gap left by Welz but is one of many who warn against writing off Strauss & Co, who, it must be remembered, remain the strongest domestic force in South African art. Also best remembered is that continuity is a strong feature because those now at the helm are not new at all to the company but worked with Welz for years – collectively 48 years, in fact. And they have a record R200m turnover for 2015 to build on. Add to that the strong brand and solid database of clients and their future certainly looks much more positive.

“Contrary to what happened internationally where major auction houses elected to operate only at the top end of the market and are now having to rethink their strategies, Strauss & Co has continued to operate in both the high end and the middle market (this also includes furniture and decorative arts) reaping substantial benefits both ways,” says Genovese.

“The weak rand, along with exceptionally high buyer’s premiums and VAT rates charged, have become a deterrent for local buyers. Conversely, the weak rand is extremely attractive for international buyers that are noticeably on the rise, in particular for decorative arts.”

Strauss are not without their rivals, foremost among them in South Africa itself being Stephan Welz & Co, the company Welz the man sold in 2006 when ill, only to recover his heath and his ambition, which led to the creation of Strauss & Co.

Ironically, despite carrying his name, the firm is still often referred to as Sotheby’s, a legacy of its former incarnation as the auction giant’s South African outpost.

With a new-look website and beefed up media section, as well as a range of specialisms that now includes vintage fashion, its owner Alan Demby clearly has his eye on an even more competitive future, especially now Welz the man is no longer a player.

These two, with Ashbey’s Galleries upping their game on European art but on a smaller scale, are setting the pace domestically.

One thing is for certain: all eyes will be on the next two or three series of sales to see how the rivals perform. The first test has been the March sales in Cape Town, which are still being assessed.

Bonhams continue to dominate international scene

On the international scene, though, Bonhams continue to dominate. It is ten years since Giles Peppiatt established The South African Sale in London and new records for Irma Stern, Vladimir Tretchikoff and others have held sway, even when lesser artists have failed to make their mark.

Here the weak rand is Bonhams’ greatest gift when it comes to consignments: quite simply, they are able to sell them for much more in London than their rivals can in Cape Town, with the caveat that currency rules mean that sellers from South Africa must re-import a hefty slice of the profits.

As for the art itself, Irma Stern and Jacob Hendrik Pierneef have dominated for a long time, but others have been showing strongly in recent years, among them William Kentridge, Alexis Preller, Gerard Sekoto, Maggie Laubser and Stanley Pinker.

“South African artists that should be followed and will in my opinion continue to appreciate are Stanley Pinker, Robert Hodgins and Lucas Sithole,” says Peppiatt. “The one artist who I think that will eventually eclipse all the South African hands is Gerard Sekoto. I would not be surprised if we sell a work by Sekoto for over a £1m in the next ten years.”

Pan-African art the next big shift

The next big shift, though, is likely to be towards the Contemporary artists from South Africa, Nigeria, Ghana and the Cote D’Ivoire, among other African countries, whose work is already being championed by new galleries in Cape Town and Johannesburg.

Africa’s most successful living artist, the Ghanaian El Anatsui, has already crossed over into Western taste. His Gustav Klimt-like bottle-top installations sell for hundreds of thousands of pounds, have won prizes at the Royal Academy and have been on show at the Met in New York and the Venice Biennale.

Events such as 1:54, the Contemporary African art and photography fair that now runs in New York and London each year, are championing new and established African talent, with the art taking on global as well as continental themes, creating mass appeal in their wake.

Names such as Sokari Douglas Camp, a Nigerian in his late fifties, Mali’s Abdoulaye Konaté, in his sixties, and Adeola Olangunju a 29-year-old Nigerian photographer living and working in Lagos, are indicative of the explosion of talent and creativity to be found. This is an unstoppable force.

Names to watch coming out of South Africa itself now include Athi-Patha Ruga, Zander Blom, Michael Taylor and Georgina Gratrix, says Genovese at Strauss.

When the Zeitz Museum of Contemporary Art Africa opens around the end of this year on Cape Town’s Waterfront as the continent’s largest gallery of its type, it should provide a hitherto absent hub for Contemporary African art that has the potential to catapult South Africa onto the international art market, taking it well beyond the modest $35m auction market value it now enjoys to something on an altogether grander scale in a global market valued at around $55 billion. If that happens, those far-sighted enough to be ready for this will be the market leaders of the future. And it will be them, whether galleries, fairs or auction houses, who will also reap the rewards of the new and younger domestic market.

Players line up for market’s next phase

Bonhams, who already hold Contemporary African art sales in London and whose London specialists across several departments can be found in the Cape on a monthly basis, are clearly getting ready for the next phase.

“The growth of Contemporary African art over the past four years has been extraordinary and nominal values have risen by over 200% in some areas,” says Peppiatt.

“In my opinion the art market in South Africa is on the verge of being the key springboard for the larger African market. There has been such growth in Contemporary African art, both from South Africa and further North, and South Africa deserves to be at the forefront of this market.”

He and his colleague Hannah O’Leary keep a close eye on the political scene in South Africa, how the Government and economy are shaping up in that other great African art centre, Nigeria, and how that all plays into the art scene.

“Those lacking a global view are most at risk of missing the boat when it comes to the changing scene in both South Africa and the continent as a whole,” says Peppiatt.

Phillips are now openly preparing to makes moves on the pan-African market and the organisers of the Cape Town Art Fair have clearly taken this message on board too. They moved the event from the Waterfront to the much bigger Cape Town International Convention Centre for its February 19 to 21 run – a bold statement.

Displaying pan-African Contemporary art, its stated aims include showcasing new trends, exposing collectors to new artists and, perhaps most interesting of all, adapting the best international practices to build and sustain an economic platform for the art market.

The challenge for the traditional auction houses and dealers in the country is to make sure they do not miss the chance to join the party when it starts.

Like London, Cape Town has the advantage of being a nice place to do business, which can only add to the mix.

Mortgage rates may be going up and food prices rising, but the art market offers a beacon of hope in these troubled times for the Rainbow Nation.

Antiques are not dying out, they are just reincarnating

Antiques reincarnation

Human nature means people will always collect, so ignore the
doom mongers who say the antiques market is in a death spiral

COMMENT: Out with old and in with the new. I’m not talking about the turn of the year but antiques, of course. We all know they are finished. Dead. Buried. It must be true because the national newspapers keep telling us that this is the case.

What’s more, they have backed it up with references to John Andrews’ Antique Furniture Index as well as the odd quote from a disgruntled dealer.

I am absolutely certain that this story breaking now could not possibly have anything to do with the time of year or the traditional scrabbling round for holiday season headlines beyond Middle Eastern doom and gloom, domestic flooding or New Year overindulgence.

A slightly closer look at the stories below the headlines tell a slightly different story for antiques, however.

Here the ‘expert’ writers share the amazing revelation that widespread formal dining, along with formal dining rooms with their heavy mahogany furniture, has become a thing of the past. Equally shocking, and something we really all need to let everyone know about, is that people have been turning to IKEA in their droves.

Where have these journalists been since the millennium? Stuck in a Chippendale cupboard?

It’s the news reporting and comment that’s out of date

The Daily Mail tells us that “Shows such as Cash in the Attic have eroded the quality furniture market”, while “Some tables which cost £6000 a decade ago are now only worth £2000”.

It seems to me that the news reporting and comment here is every bit as antiquated and uninformed as the views being espoused.

The fact that run-of-the-mill traditional Georgian and Victorian furniture has suffered greatly over the last 15 years is hardly news. But extrapolating the collapse of the entire antiques market from what has been happening to a corner of the furniture market illustrates the level of expertise being applied here.

Having edited Antiques Trade Gazette, the leading industry newspaper, for 15 years until last year, I have noted one or two things:

  • The word antique refers to anything over 100 years old, which means it is an ever-changing market;
  • Amazingly, tastes change; and
  • Equally amazingly, many markets are cyclical and yesterday’s piece of junk or outmoded collection of antiques sometimes turns out to be tomorrow’s retro must-have.

Janice Turner, writing in The Times on January 2, ironically slightly behind the times herself in arguing that the move is away from antiques towards a cheap throwaway culture even for furniture (hasn’t she heard of the rather more up-to-date upcycling and the return to the BoHo chic distressed look?), says that most people want constant change these days, explaining the popularity of IKEA, and that “even the nicest brown furniture looks like it belongs in a funeral home or a Dickens set”.

I suspect that Janice has never come across nice stuff like the Arts & Crafts Movement and Godwin, or early 20th century giants like Rennie Mackintosh, Gordon Russell and Robert ‘Mouseman’ Thompson. Mostly antiques now and nothing funereal about them. Prices seem ok for sellers, too, so someone’s prepared to pay for it.

Chinese buying bog-standard British antique furniture?!?

And where did she get the idea that the Chinese have developed a taste for bog-standard British brown and are snapping it up as fast as we can ship it out to them?

Tell us the secret to that one and, to paraphrase Del Boy Trotter, next year we’ll all be millionaires, Rodney.

One of the biggest growth areas in recent times has been the revival and development of that most Victorian of obsessions, taxidermy. Now that Hoxton hipsters are seen as rather passé, I await the first stuffed and mounted example on the wall of Shoreditch House or the Groucho Club.

Not that long ago, I found myself looking through the 1928 Olympia antiques fair catalogue. It was not just the black and white photography that looked dated, but much of the heavy Georgian and Regency furniture being promoted in it (most Victorian pieces, at that time, were not yet antique, of course). And it was also not that long ago that fairs like Grosvenor House would vet anything off that was post 1837.

The dealers who do not even know they are part of the antiques trade

Guess what? The antiques trade moved on and discovered the virtues of Victoriana in all its forms. Now they are doing the same with early 20th century design and even, shock, horror, post-War pieces – not even ANTIQUE yet!!

Nor is Art Deco, a trade and collecting favourite for decades.

Sections of the antiques trade are doing badly. Personally, I think it will be a long time, if ever, before the ordinary mahogany bedroom furniture of yesteryear makes a comeback.

But I also think that the great tradition of collecting is here to stay – as the recent Star Wars toys sale at Sotheby’s in New York showed – as is the desire to own great designs and well-crafted pieces.

In my view, the most fascinating aspect of today’s antiques trade is that so many people are utterly unaware that they are part of it. If you have a shop selling vintage clothing, or stand at a weekly market punting fifties and sixties retro chic kitchenware, you are already part of today’s antiques trade.

Great, isn’t it. And have you noticed just how many of the buyers are in their twenties and thirties? Yes, me too.

Give people the chance to see this stuff – and the money to buy it – and they will clear out the flatpacks to make way for it, believe me. Saleroom prices show this now.

As these people start to earn more, and switch on to the thrill of saleroom bidding or visiting fairs and galleries, history shows that they will start to spend at a higher level too.

Technology is also moving on, giving them easier access to what may interest them.

If the trade really were on its last legs, why have so many magazines and websites just published predictions for the year ahead on what is likely to be hot when it comes to the art, antiques and collectables market?

Furnishing trends may be changing because homes are, on the whole, smaller, but it’s a big world out there and people adapt. Key antique statement pieces often form the focus of more modern interiors, and smaller antique collectables still attract buyers in their droves when presented well. Just take a closer look at what’s really going on and you will see.

Hugh Scully, a man sadly ahead of his time

How the BBC reported the death of Hugh Scully yesterday.

How the BBC reported the death of Hugh Scully yesterday.

When Hugh Scully left Antiques Roadshow to launch his online valuations business, it was doomed from the start, as I realised at the press launch

It is 16 years almost to the day since Hugh Scully announced that he was to be the face of Hugh Scully’s World of Antiques, a new online valuations service for internet auction house QXL.com

In what appeared to be an unrivalled coup at the time, the five-year deal was set to net the Antiques Roadshow presenter £3m, made up of an initial payment of £700,000 paid through his production company, Fine Art Productions Ltd, and a further £2.3m profit share, payable on the service’s launch in 2000.

The fact that QXL offered him the chance to take £2m of that money in shares instead of cash illustrates how bullish internet start-ups were as they rode the crest of the first wave of development of what we called the Information Superhighway.

If other plans for the show seemed ambitious at the time, they appear astonishing now, and only serve to illustrate the general naivete of attitudes to the internet in 1999. Scully’s plans included a daily antique auction, collectors’ club and chatroom.

Whether he opted for the shares rather than the cash remains unclear – did they ever reach the 195p option price? – but he was the envy of just about every auctioneer and dealer in the land, and one could only admire his acumen.

However, what was clear to me from the start was that the service simply wouldn’t work.

Food poisoning and the press

It did not augur well when the first of two press launches, held at one of London’s smartest restaurants, ended in mass food poisoning. (It was a reminder, if one was needed, of just how ready investors at the time were to splash the cash, no questions asked.)

Fortunately for me, I had chosen to forego the feast in favour of the second press launch, the next morning, in an internet café on Golden Square. There I spent a couple of minutes interviewing Scully, who was evidently still suffering the effects of the previous night’s debacle and could barely make it through.

It’s astonishing now to recall just how naïve the business model was for the QXL service, but even then it immediately rang alarm bells, especially as it was billed as an all-in-one automatic service, something it plainly wasn’t.

The premise was that those wishing to have objects valued would take a photo, have it processed at a well-known high street store (i.e. Boots) and then email a digital version of the image to QXL who would employ a legion of specialists all over the world to value the item on the basis of the photo.

Quite simply, this was an idea way too ahead of its time, an irony as Scully’s death comes just weeks after Auctionata announced they were buying online valuations service ValueMyStuff.

Three questions which showed Hugh Scully’s project would not work

The answers to three questions I asked Scully that day meant that I left Golden Square certain that the project was doomed. The first was how potential clients got hold of a digitalised image – this was in the age before digital cameras and email saturation.

His answer was that they would take their photo down to a high street shop and have it scanned in before having the digitalised version emailed back to them.

The second question was: Had the deal been done with the high street chain? Answer: Not yet.

The third question sealed its fate in my mind: How much was all this going to cost?

When I added up the initial price of having a film developed – 24 or 36 images printed up at one go was the norm then – the charge by the high street chain of digitalising the image and emailing it to the client, and then the cost of the valuation itself, it struck me that the whole process would come to a minimum of £25 to £30 per client valuation.

Add to this the widespread lack of access to internet services and email, especially among those who had both the objects to value and the money to pay for such a service, as well as all the hassle of taking the photos, visiting the high street, waiting for the email and so on, and it was impossible to see how the service would ever get off the ground, let alone thrive.

If I could work this out in a couple of minutes, surely others would soon arrive at the same conclusion? But it seemed not.

Three months later Scully was billed as a keynote speaker at the first conference on Internet Options for the Auctioneer at Southampton Institute, where most of the industry declared itself still “bewildered and confused”.

Antiques Trade Gazette Internet Handbook advice

At the same time, I was writing a piece for the second Antiques Trade Gazette Internet Handbook entitled Back to the basics of business: Home truths about global communication.

Having trawled through 700 websites to see what worked and what did not, I had my fill of horrors and frustration, concluding: “…however slick the technology, we should not lose sight of the unchanging truth about business success: the technology is the means to an end, not the end in itself. It doesn’t matter how interactive, flashy or colourful your Website, it is the quality of the goods on offer and the quality of the service the customer receives that will determine its long-term prosperity.”

QXL suspended the antiques valuation site 18 months later, a few weeks before 9/11. The deal with Boots had never come through and the public had not proved the eager early adopters QXL anticipated.

Hugh Scully effectively disappeared from our screens. Many other internet start-ups pretty quickly followed suit. They may have failed, but you have to admire their pioneering spirit, even if, in many cases, business sense had been left at the door.

What they did contribute was the development of caution and a more realistic approach to the boundaries of technology when the second wave started. They also did considerable groundwork in software development from which later ventures benefited.

It was reported that Scully had hoped to retain his Roadshow role alongside the new venture, but it was not to be. I only hope that he made enough from the deal in the end to enjoy a fulfilling retirement.

Art market manipulation is an issue; lack of perspective is a crisis

Art-market-manipulation

Practices at the top end of the art market lay it open to the risk of manipulation. But it is the culture that allows this to happen that is the biggest threat

COMMENT: Scott Reyburn, an erstwhile colleague of mine and certainly one of the finest writers focusing on the international art market today, creates an imaginary scenario to illustrate the risks of market manipulation in his September 25 post for the International New York Times.

Titled A Tug of War Over Art-Sales Transparency, it brilliantly illustrates the sort of thing that happens at the top, or even top-middle, end of the art market.

The scenario has a fictional dealer grooming a young artist for stardom and then manipulating auction prices to build the legend around him/her with the help of a few friends before cashing in.

While Reyburn remains enigmatic as to whether this sort of manipulation has indeed happened, I do not. I’m quite certain that it is as accurate a picture as can be drawn of some people’s behaviour in the Contemporary art world.

What is particularly interesting about the piece is that although the scenario focuses on the manipulation of an unscrupulous dealer, it is more concerned with the opacity of auctions at the top end.

“Just what exactly is going on when a dealer tops up the bidding on a young artist in whom he has taken an investment position? And are there conflicts of interest when an auction house shares a financial guarantee with a third party?” he asks.

Serious questions indeed, but actually whether there is a conflict of interest or not, whilst hugely important, in my opinion is of secondary significance in the wider debate over competition at the top end of the Contemporary art auction market.

Loss of perspective is what’s really scary

To me, the really scary part is the loss of perspective at the top; the detachment from the real world and what that means.

It’s scary because it is exactly the same sort of loss of perspective that led to the MPs’ expenses scandal at Westminster, the phone hacking crisis among the British national press and, in years gone by, the groping and worse behaviour of 1970s and ‘80s DJs and TV presenters.

Everyone does it and it goes with the territory so that means it’s ok… doesn’t it?

As I wrote in Antiques Trade Gazette last December, in an article entitled Smoke detectors, the essential tool for Christie’s and Sotheby’s in today’s art market, “as far back as 2011 The Economist reported a list of leading dealers as guaranteeing works at auction. It remains unclear whether the trade are guaranteeing works by artists they represent directly or have a clear financial interest in propping up, but if so, then this is surely a step too far along the road of market manipulation.”

As I argued last December, “It might be clever; it might even be legal, but as far as I (and I suspect the man in the street) am concerned, one thing is certain: it isn’t right.”

The fact that this sort of behaviour is seen as acceptable at the top end of the auction market supports my belief that the pressure to perform in such a highly competitive atmosphere has caused decision makers to lose touch with reality.

““Such loss of objective perspective can make one genuinely consider all sorts of practices normal and acceptable, only to discover in the cold light of day, once the party is over, that the rest of the world deems them anything but.”

Act soon or live to regret it

My view remains unchanged, as does my conclusion:

“The test is: would I feel confident attempting to justify my actions in front of a government select committee or the equivalent committee in the Senate or House of Representatives if they decided to review practices within our industry?”

Having moderated the main debate on market regulation at this year’s Art Business Conference, I am not in favour of outside regulation for the art market beyond what we already have. However, Scott Reyburn, along with my fellow moderator Dr Tom Flynn and fellow panelist the art market lawyer Pierre Valentin, are right in taking a shot across the bows of the auction houses as reminder for them to get their act together.

Art market regulation? Here’s why not

Ivan Macquisten addresses delegates as mediator of the regulation debate at the Art Business Conference in Westminster on September 3. Photo: Bogdan Maran

Ivan Macquisten addresses delegates as mediator of the regulation debate at the Art Business Conference in Westminster on September 3. Photo: Bogdan Maran

Law makers, politicians and critics want to bring the art market to heel.

But they are not helping us or themselves in their misguided demands

Art has developed as such a strong alternative asset class in recent years that the debate over direct market regulation has become increasingly heated.

Where money looms large, ethics can play an important part in providing a practical solution in the marketplace for avoiding trouble, building confidence and ensuring stability. Clear standards and the adoption of best practice are essential building blocks towards this goal.

They are particularly important in the international art market because however much the authorities or vested interests might want to legislate, history tells us that comprehensive direct regulation is largely unworkable and serves only to damage markets while failing to prevent crime.

As art market lawyer Pierre Valentin argued at September’s Art Business Conference in Westminster, the establishment of the Conseil des Ventes in 2000 as a regulatory body to oversee the French auction market did nothing to prevent the emergence of the huge corruption scandal among the ‘cols rouges’ porters of the Hôtel Drouot, Paris’s centre for auctions, in 2009.

In the UK, attempts to get to grips with stolen and looted art via the establishment of a centralised Home Office database 15 years ago fell apart because, having backed the plan after much deliberation, the Government refused to finance it, Scotland Yard soon faced other priorities after 9/11 and international co-operation proved more difficult than anticipated.

At a more prosaic level, anti-corruption policy meant that officers across the UK’s police forces assigned to dealing with art theft were reassigned after 18 months in the role – just as they were beginning to establish contacts and develop an understanding of the issues.

 

History tells us that the political will and financial commitment are just not there

Where was the political will then? And, in reality, where is it now?

Britain is among the top three most successful art markets in the world. Politicians wanting to tinker with that will have to face a number of home truths Valentin also highlighted in the regulation debate:

  • Regulators tend to be bureaucrats who lack market knowledge;
  • Those in charge of enforcing compliance tend to be poorly paid and resourced, with the result that monitoring standards often reflect this;
  • Regulators cannot keep up with the pace of change; and
  • The myriad of variations across international borders make it all but impossible for global market regulation to work effectively at a national level.

Much of the unpopularity of the European Commission stems from its image as an all-powerful regulator, answerable to nobody, that inflicts unsuitable business-busting rules on member states in the interests of political expediency and so-called ‘harmonisation’.

Perhaps the most detailed proposal for regulation in recent months has come from Dr Thomas Christ and Claudia von Selle of the Basel Institute of Governance. Their intermediary report of a self-regulation initiative for the art market, entitled Basel Art Trade Guidelines, argued that the current level of regulation and compliance was “insufficient”.

“With some competitors engaged in unethical or illegal behaviour, operating profitably while acting with integrity and ethics is increasingly difficult,” they concluded.

The detailed proposals correctly identified many of the issues that trouble the market, but, as is so often in such reports, set out a structure for governance that was simply impractical in a global market where the vast majority of businesses are fairly small operations.

As with EU bodies, the report’s proposed governing secretariat (run at Basel by, presumably, those compiling the report) carries all the hallmarks of being yet another self-important and costly institution handing down diktats to a world from which it is entirely detached, and all paid for by business whose trade risks grinding to a halt under its aegis.

Where is the understanding of the needs of small businesses? Of the need to act quickly in a fluid marketplace? Of how to oversee effective sanctions? Of realistic appraisal of art market processes and what regulatory interference buyers and sellers would stand for?

The Basel report does have merits, but it appears to take a rather Panglossian approach to the mechanics of its establishment; just how co-operative would business and government be in funding its requirements?

In fact, taken to its conclusion, one wonders how the work of such a governing body would really differ from direct regulation?

 

What about the ethical dimension?

Dr David Bellingham, Programme Director for the Masters Degree in Art Business at Sotheby’s Institute of Art, launched the Art Business Conference debate on how the art trade can best protect its clients’ interests by looking at ethics.

Firstly, you must decide which ethical philosophy you are concerned with, he argued: Pragmatism, Relativism or Utilitarianism.

Before you dismiss his thoughts as highfalutin’, his point is that one cannot presume to solve a global problem from a narrow Western perspective. It was an original point, and well made.

I would largely call myself a pragmatist, in favour of practical solutions that follow the rule of law. I’m not without a moral compass, but if an uncompromising moral standpoint does not produce a workable proposal, then what is its purpose?

Emerging markets often focus on relativism, setting aside universal and absolute ethical standards in favour of dealing with things as they are in the specific cultural context. It’s a risky approach, though, as oil companies and others have found when falling foul of bribery scandals as they negotiate contracts with officials in Africa and the Far East.

As far as I am concerned, Utilitarianism should play no greater place in the art market than it already does, for instance in blocking the export of cultural objects of outstanding national importance. (Note my use of the word ‘outstanding’.) It’s no good cherrypicking your favourite clauses from the UNESCO Convention. Follow one and follow all or forget it.

You just have to look at what is happening in Germany at the moment to understand the problem. If passed, its Cultural Property Protection Act will force anyone wishing to export a cultural artefact valued at €150,000 or more and that is older than 50 years to secure an export licence.

 

The folly of Germany’s Cultural Property Protection Act

How does this support the nation’s art market? How do you define a cultural artefact? Who decides on the valuation? Who now will export artworks to Germany for sale? Who, in Germany, will have the incentive to become/remain serious collectors? How will Germany retain the cream of its cultural expertise when lucrative careers in New York, Hong Kong, the Middle East and London beckon that do not tie them up in knots?

If this isn’t the way to kill legitimate commerce, I don’t know what is.

Dr Bellingham concluded his introduction at the Art Business Conference by distinguishing between codes of ethics and codes of conduct/practice. The first are aspirational, the second enforceable.

And here’s the rub. Professions tend to foster professional bodies. They help them burnish their credentials, provide a mediating force for clients and, where effective, separate the wheat from the chaff among the professionals.

The art market is no different and it is clear from the conference debate that most see the various trade and industry associations as being central to any form of self-regulation in both established and emerging markets.

However, as we debated on the day, trade associations have inbuilt weaknesses. They tend to rely on their membership for funding and unless they have impressive cash reserves are understandably loath to diminish their numbers, even in the interests of quality control, except in extremis.

Chucking out a powerful member who might turn on them legally would give anyone pause for thought, but expulsions do, on occasion, take place. Publicising the expulsion is all but unheard of for the same reasons noted above, despite the potential benefit of boosting public confidence in the association by showing that it has teeth.

Likewise, the confidential nature of milder complaints, in which the association plays a successfully mediating role, usually means that it cannot publicise that success.

In short, those who run associations are often caught between a rock and a hard place. They must be seen to be acting in the interests of their members, but also in the interests of the public against their members when necessary. They are expected to demonstrate this publicly while being constrained by confidentiality agreements and the risk of actions for defamation.

An OfArt, like OfCom, might get round these weaknesses, but then you are back with the problems of cost, red tape, interference with legitimate interest and so on.

Nevertheless, I suspect that properly developed, the answer does largely lie with associations and trade bodies. They can filter out the undesirables, they do encourage best practice, set out codes of conduct, support members and their clients in resolving disputes and help boost confidence in the professionalism of those members.

 

The answer is to create incentives for businesses to behave better

This public service ‘branding’ can be invaluable in helping develop new markets, just as, in China for example, bidders at auction tend to chase classic brand names when buying wine, jewellery and other collectables.

Specific professional qualifications should, in my view, attract preferential treatment when crossing international boundaries, especially into emerging markets that do not yet have the infrastructure for policing their own, as yet undeveloped, set of industry guidelines. Internationally recognised standards in security, packing and shipping should help companies win reduced insurance premiums as well as fast-track processing across borders.

In short, I would like to see more carrot than stick in promoting best practice. There has been far too much of the latter in recent times and, as another speaker at the conference, Robert Hiscox, pointed out, insurers are effective at back-door regulation by refusing cover to the dodgy.

Establish your kitemarks and then show business how it can use them to promote its brands and save money.

Competition in the market is primarily about client service these days. The best way of making ethics work on a global basis in this context – notably in emerging markets – is to make them pay.

Cork Street and Mayfair – the Royal Academy’s new Narnia

David Chipperfield's new link between the Royal Academy and 6 Burlington Gardens

David Chipperfield’s new link between the Royal Academy and 6 Burlington Gardens

How the Royal Academy’s new architectural link may well lead to the building of even more important cultural and commercial links

Two parallel worlds suddenly and dramatically linked by an unexpected and hidden doorway. In the case of C.S. Lewis’s The Lion, the Witch and the Wardrobe, Lucy Pevensie first discovers the magical world of Narnia while playing hide and seek, pushing her way through a store of fur coats at the back of a deep wardrobe until she finds herself brushing aside the branches of fir trees and emerging into a snowy landscape.

As of 2018, visitors to the Royal Academy will also be able to make their way from the world of public art through the new link corridor joining the RA’s Burlington House off Piccadilly to 6 Burlington Gardens, the building it acquired in 2001.

In turn, this access will help introduce the art-loving general public more directly to the wonders of a new world many will not have seen before: the art trade in Mayfair, most specifically in Cork Street, which lies just across the road from number 6’s front door.

Even better, the £50m transformation of number 6 includes a 300-seat lecture theatre, a permanent home for Royal Academy Schools students to exhibit their work and more space for contemporary and current exhibitions. The public coming through from Piccadilly will also gain access to one of the best-kept secrets of 6 Burlington Gardens: the Cast corridor.

Making a whole new world of artistic connections

The single most important change is that the Burlington Gardens building will be used a great deal more on a daily basis. As architect Sir David Chipperfield put it, “We’re knocking a hole in the wall. It’s a small amount of architecture for a large amount of result.”

So Royal Academy students will be regular visitors to the building, giving them the opportunity to look across the road to commercial galleries that could soon become their mentors and representatives.

This is very welcome news after the depredations dealers have faced in the Narnian-like perpetual winter of recent years, forced out of galleries they have occupied for decades as the White Witch of luxury brands and property developers has cast her frozen spell.

As Charles Saumarez Smith, the secretary and chief executive of the Royal Academy, told The Guardian: “This is not just a major building development, it is an undertaking which will transform the psychological, as well as the physical, nature of the Academy.”

And just in time for the RA’s 250th birthday.

The Association of Leading Visitor Attractions lists the Royal Academy as having had just under 825,000 visitors for 2014, putting it in 35th place. That was a 19% fall from the 1,015,505 it welcomed in 2013, when it took 26th place, itself a 19% fall from the 1.2 million that brought it 17th place in 2012.

Since then the Houses of Parliament, Kew Gardens, the RHS Wisley and even Glasgow’s Kelvingrove Art Gallery and Museum, among others, have surged passed it, so the revamp and extension come at just the right time to breathe new life into Burlington House and the Royal Academy’s collection and exhibition programme.

Playing the percentage game with the Royal Academy’s visitors

If even 1% of those who pass through its portals – already interested in art by the very fact of their visit – proceed through the link to 6 Burlington Gardens and out the other side, that will mean close to 10,000 people already thinking about the wonders of art entering the magical world of Mayfair and its unrivalled gathering of fine art and antiques businesses. Echoing Charles Saumarez Smith, it will be a psychological transformation for both public and trade.

Not only that. The business potential for all will blossom too. As a public institution, using a fair proportion of its new space to educate artists in their formative years, the new-look Royal Academy will doubtless be looking for support in various guises to help keep its programme fresh and vibrant.

What better opportunity can there be for auction houses and galleries to offer their services and even financial backing in forging new relationships with the Royal Academy and its students? It could even help fill one of the biggest and longest-standing gaps in fine arts degree courses: teaching student artists how to negotiate their way into the commercial market and make a living.

This must surely provide one of the best arguments of all for Westminster Council to press ahead with its Special Policy Area initiative, aimed at protecting the cultural and artistic profile of Mayfair.

The unique juxtaposition of the expanded Royal Academy with the premier art-dealing enclave this side of the Atlantic should also give the Government pause for thought as it brings together the politically attractive possibility of boosting the nation’s culture, business and employment prospects in one fell swoop.