The art market is seeing a decline

Tue May 14 2024
Rachel Long (661 articles)
The art market is seeing a decline

Christie’s continues to be affected by an ongoing cyberattack, which has severely impacted the functionality of the auction house’s website and disrupted its ability to process online bids. This has the potential to significantly impact its sales, which are valued at a minimum of $578 million, for the art that is being auctioned off this week. The auctions will commence tonight, beginning with a pair of contemporary art auctions as part of New York’s prominent spring sales.

Christie’s has been dealing with the consequences of a technology security problem since Thursday morning. The auction house has had a breach or a potential threat, but it has chosen not to disclose specific information due to its security measures. Christie’s also refrained from disclosing whether any of the confidential or financial information it gathers from its affluent customers had been compromised or pilfered. However, the company assured that it will notify customers if such an incident is confirmed.

“We are currently in the process of resolving the incident, however, we are committed to maintaining our sales operations and ensuring our clients that it is secure to participate in bidding,” stated Chief Executive Guillaume Cerutti.

Sotheby’s and Phillips have not documented any comparable breaches on their websites.

Christie’s predicament arises during a particularly delicate period for the worldwide art industry. Prior to these benchmark spring auctions, analysts were already cautious due to broader economic concerns over wars and inflation, which have eroded collectors’ trust in art prices. Christie’s had a decline in sales to $6.2 billion in the previous year, representing a 20% decrease compared to the year prior.

Doug Woodham, the managing partner of Art Fiduciary Advisors and a former president of Christie’s, stated that individuals do not wish to experience the presence of fraudsters looming over the act of purchasing art, which is meant to be an enjoyable hobby or a significant investment. “If anything hinders the enjoyment of the activity, it becomes problematic because bidders have options,” Woodham stated.

Cerutti acknowledges that the house has made significant efforts to demonstrate to the world’s richest collectors that they may shop seamlessly, despite discreetly seeking assistance from a team of internal and external technical specialists to address the security issue. At present, the organization is adhering to its planned timetable for conducting six auctions of impressionist, modern, and contemporary art, as well as two luxury sales, in New York. However, the watch sale originally slated for Monday in Geneva has been postponed to today.

Christie’s faces its first major challenge tonight with the auction of the estate of prominent Miami collector Rosa de la Cruz, who passed away in February. The private foundation’s collection includes “Untitled” (America #3), a series of lightbulbs created by Félix González-Torres, which is expected to fetch a minimum of $8 million.

Cerutti confirmed that none of the consignors to Christie’s have chosen to remove their artworks from the sales this week due to the security incident. Following the De la Cruz sale, Christie’s 21st Century sale on Tuesday will feature a few of more expensive and influential artworks. These include a diptych by Brice Marden titled “Event” and a piece by Jean-Michel Basquiat from 1982 called “The Italian Version of Popeye Has no Pork in his Diet.” Both artworks are expected to be sold for a minimum of $30 million.

However, the cyberattack has already changed the way certain collectors may perceive these significant auctions at Christie’s. Prior to participating in sales, previously registered online bidders have the capability to access the main website and log in. During this week, the house will send them an email containing a secure link that will bring them to a secret Christie’s Live site. On this site, they will have the opportunity to watch and place bids in real time. All other individuals will be urged to either phone or attend the auction at the house’s salesroom located in Rockefeller Center in Midtown Manhattan.

If a greater number of bids attend the event in person, it could potentially result in a crowded and uncomfortable experience. Amidst the pandemic, Christie’s transformed its primary auction room into a well-lit area resembling a television studio, with fewer seats and more mobile cameras. This adaptation is part of the auction industry’s wider initiative to attract a larger audience of collectors and art enthusiasts by broadcasting the events online.

After the smaller-capacity saleroom is fully occupied, Christie’s will guide individuals to further rooms in the building to accommodate the overflow. Individuals who wish to solely observe the sale are unable to do so on Christie’s website as normal, but they can instead follow the proceedings on Christie’s YouTube channel.

Art adviser Anthony Grant stated that he usually attends large sales to bid on behalf of his customers. However, he mentioned that his collectors also follow the sales online to observe the atmosphere and send him real-time updates. Grant stated that a European collector, who plans to compete for a piece at Christie’s, had provided Grant with a predetermined sum of money to use.

Grant mentioned that the incident was a frequent topic of discussion in his conversations throughout the weekend. “There is a significant amount of deceptive or dishonest behavior occurring, and individuals have become increasingly sensitive to the occurrence of their financial institutions and medical facilities being unlawfully accessed,” he stated. “Currently, their auction house is experiencing a similar situation, which is quite bothersome.”

Rachel Long

Rachel Long

Rachel Long is our Desk Correspondent covering Stock Markets across the globe. She is based in New York