(Bloomberg) -- With the bellwether art auctions in New York just days away, Christie’s is looking East to boost its shrinking business.
The company decided against holding an extra, curated auction during the semiannual sales in New York the week of Nov. 13, which it’s done since 2014. Instead it’s putting resources behind an exhibition in Hong Kong later this month that will offer an estimated $250 million of Western art to buyers in one of the industry’s fastest growing regions: Asia.
“We are taking the material to the strongest market at the moment,” said Brett Gorvy, Christie’s global head of postwar and contemporary art. Doing another curated sale “in today’s market is difficult. That’s not what collectors are responding to.”
Public auctions have contracted dramatically this year, with the upcoming cycle expected to tally at least $1.06 billion, a 49 percent drop from the low estimate a year ago. Most of the decline is attributed to a dearth of top artworks whose owners are reluctant to risk having them go unsold publicly and to auction houses scaling back on guarantees after losing millions of dollars on the deals last November.
“It’s a very strange transitional moment,” Gorvy said. “You’ve got as many buyers. What you are missing is the supply of high grade material.”
More than a dozen artworks each fetched more than $30 million during the similar auction cycle last year, with Amedeo Modigliani’s “Nu couche” selling for $170.4 million to Chinese billionaire Liu Yiqian. This month, only four artworks are estimated at more than $30 million.
Gorvy is trying to break “the vicious cycle” by procuring trophies for Christie’s private sale in Hong Kong, called “The Loaded Brush.” The show will have about 15 high-value Impressionist, modern, postwar and contemporary paintings such as a 1963 Willem de Kooning canvas titled “Pastorale,” valued at about $35 million, as well as lower-priced ceramics and works on paper, Gorvy said.
A private sale presents less risk for sellers because the outcome is not public. If the work fails to find a buyer at auction, it’s listed as “bought in” in auction databases and is considered “burnt” by the market. If the work doesn’t sell privately, few people find out. That’s why some sellers may be willing to part with their trophies privately when the market is wobbly.
Asian collectors’ appetite for Western art has grown rapidly this decade with regional billionaires snapping up dozens of masterpieces by artists such as Pablo Picasso, Claude Monet and Mark Rothko. More recently, buyers have been also setting auction records for younger contemporary artists such as Adrian Ghenie and Jenny Saville.
Asian clients accounted for 20 percent of bidders and buyers in the price band of 10 million pounds ($12.5 million) or more in 2015 at Christie’s postwar and contemporary art auctions, up from 7 percent in 2012, the auction house said.
Christie’s competitors are also chasing Asian buyers. Last month, Sotheby’s held a successful auction of contemporary Western and Asian art selected by the Korean pop star known as T.O.P. in Hong Kong. Auction house Phillips is holding its first contemporary art auction in Hong Kong on Nov. 27, headlined by a Roy Lichtenstein landscape painting and Gerhard Richter’s abstract canvas.
“As the market has matured in Hong Kong, collectors in that part of the world are looking for very similar material as collectors elsewhere,” said Ed Dolman, chief executive officer of Phillips. “Now there’s a big group of collectors in China looking at the international contemporary art market and then there are uber-collectors, who have museums and are looking for masterpieces of Western art.”
Unlike Western collectors, who prefer the clandestine nature of back-room deals, new Asian clients like the greater transparency of auctions and art fairs, Gorvy said. Knowing that, he’s bringing the private sale to them in the form of a public exhibition in Hong Kong opening on Nov. 24, the eve of a six-day auction marathon. Collectors from China, Korea, Taiwan, Japan, Singapore and Malaysia are expected to descend on Hong Kong Convention and Exhibition Center -- offering him a captive audience, he said.
“In Hong Kong, the auction rooms are packed with private collectors who compete with each other,” he said. “In New York, most sales are packed with dealers and most action is on the phone.”
There are an estimated 25 to 30 collectors in Asia who can spend $40 million to $50 million on a single artwork, Gorvy said. “That’s a lot of people.”
He expects to offer clients $250 million to $280 million of art at the private sale. That’s about the mid-range of Christie’s evening sale of postwar and contemporary art in New York on Nov. 15, which is estimated at $228 million to $312 million.
The embrace of Western art is “part of their evolution as collectors,” said art adviser Grace Rong Li, whose Asian clients have been acquiring it since 2009. “They travel more overseas. They become more sophisticated. They learn really fast.”