BOUNDLESS PASSIONS

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Philippe Ségalot's “Carte Blanche” contemporary-art sale in New York was an auction as self-portrait ...

From THE ECONOMIST online

This month saw the launch in New York of a new kind of contemporary-art auction, one in which a single major player in the art market is invited to create “the sale of his dreams”. Set up by Phillips de Pury & Company and held in the firm's new premises on the corner of Park Avenue and East 57th Street, the auction was promoted as a “game changer”. Phillips hoped it would help boost its flagging sales. Some described it as sub-contracting; others called it curating. The auction house named the sale “Carte Blanche”, a title that, among other things, is a reminder of the art market's lack of regulation.

Philippe Ségalot, an art consultant and private dealer, was responsible for persuading sellers to consign the 33 lots that inaugurated “Carte Blanche”. He also advised many of the buyers. Mr Ségalot ran Christie's contemporary-art department between 1998 and 2002 and now works on behalf of a number of rich collectors, including a member of the art-buying royal family of Qatar. For “Carte Blanche”, French-born Mr Ségalot was, in his own words, the “chef d'orchestre”. The works consigned for sale went through his office rather than Phillips's art department. So did the paperwork for the pieces that he purchased on behalf of his clients. In return, he received a percentage of the buyer's premium. “I'm so controlling,” explained Mr Ségalot. “Phillips played the game 100%. They gave me a real carte blanche.”

Phillips and Mr Ségalot were keen to show that they could mount a contemporary-art auction as good as anything put on by the market leaders, Sotheby's and Christie's. On the night, some astonishing prices were paid for unlikely works. The sale brought in $117m (including commissions), a record for the auction house. Simon de Pury, the evening's auctioneer and a minority owner in Phillips, described the sale as “a self-portrait of Philippe Ségalot”. But the art world suspects that some of the buyers may be less than delighted in the long run.

The auction was certainly distinctive. On a number of lots, Mr Ségalot was seen to be bidding against his assistant, Ali Rosenbaum, and also his business partner, Franck Giraud. All three would have been representing collectors. Asked whether acting for buyers as well as for sellers on the same lot might constitute a conflict of interest, Mr Ségalot insisted it was not a problem. He said he went to his clients before he committed himself to “Carte Blanche”, explaining that it would be a “good vitrine for me” and they were “excited enough to participate.”

Financial guarantees also helped secure a number of consignments. Auction houses stopped offering these after sustaining heavy losses during the early months of the financial crisis. As confidence has returned to the market, guarantees have made a reappearance in the form of “irrevocable bids” from anonymous third-party investors that ensure works sell for a minimum price, with the investor taking a larger cut of the price if it exceeds the guarantee. Not on this scale, though. Seven of the 33 lots in “Carte Blanche” were guaranteed, a far higher percentage than offered either by Christie's or Sotheby's in their contemporary-art sales the same week. (Christie's offered guarantees on seven out of 76 lots; Sotheby's only on four out of 55 lots). On the night, Mr Ségalot and his assistant, bidding on behalf of their clients, bought six of the seven guaranteed lots—four of which made record prices. As Mr Ségalot explained, “These were works I liked very much. Of course I advised my clients to consider them.”

It was puzzling, however, to see Maurizio Cattelan's minor work, “Stephanie” (2003), a sculpture of a model named Stephanie Seymour naked from the waist up, in the prime marketing spot on the cover of the catalogue. The consigner of “Stephanie” was not declared, but sources confirm that the sculpture belonged to François Pinault, the owner of Christie's. He and Mr Ségalot are old friends, and it looked good to have the support of such a high-profile collector. For his part, Mr Pinault managed to get away with offloading a work that the artist doesn't rate highly and one that his own staff at Christie's wouldn't miss. Nevertheless, consigning a cover lot to a rival auction house is a bit like the owner of Chelsea football club buying new boots for Arsenal players. It's not illegal but it's weird.

“Carte Blanche” also saw its share of uncharacteristic buying. José Mugrabi and his family have a reputation for being bargain-hunting dealers with large inventories of Andy Warhol, Jean-Michel Basquiat and Damien Hirst. In this sale, they acquired the lots that featured on both the front and back covers of the catalogue, in each case taking the unusual step of paying more than the high estimate. They bought Mr Cattelan's “Stephanie” for $2.4m and Takashi Murakami's “Miss ko2” for $6.8m.

While the Mugrabis paid more than expected for those lots, they also got far more than expected for a picture of their own: a 1962 Warhol titled “Men in Her Life” (pictured top, detail). The “Carte Blanche” catalogue said that the estimate for the picture was available “on request”, which is not uncommon for the top lot in a sale. Warhol experts beyond Mr Ségalot's immediate circle suggested the painting was worth $15m-25m. Mr Ségalot, bidding on behalf of a client, bought the picture for $63.4m. Patricia Hambrecht, a director at Phillips, was the underbidder.

“Men in Her Life” was guaranteed for at least $42m by a third party, rumoured to be the Mercury Group, the principal owner of Phillips. (The Mercury Group is a Russian luxury-goods business owned by Leonid Friedland and Leonid Strunin, otherwise known as “the Leonids”.) The combination of Phillips's recent move uptown from its previous space on West 15th Street and a big Warhol sale was a sure-fire way of putting the auction house on the map.

The price achieved by “Men in Her Life” was unusual, particularly as Sotheby's and Christie's were also selling large-scale Warhols painted in the same year. Going into the auction week, the art-world's favourite Warhol was Sotheby's “Coca Cola” (pictured above), an iconic, hand-painted canvas that had established the record for the highest price ever paid for the artist's work on the one occasion that it changed hands back in 1983. The largest of Warhol's four Coke bottle paintings, the piece had toured many museums as part of an important Warhol retrospective organised by the Museum of Modern Art in 1989.

The 1962 Warhol sold by Christie's also has “wall power” and an illustrious provenance. Titled “Big Campbell's Soup Can with Can Opener (Vegetable)” (pictured right), the painting was the first Warhol ever shown in a museum and was once owned by the Tremaines, legendary art collectors. The picture has the benefit of vibrant colour—soup-can red—although some find its composition awkward.

“Men in Her Life”, by contrast, is generally perceived as an interesting outcast. The painting represents a complicated moment in Elizabeth Taylor's life and is linked, aesthetically, to Warhol's famous disaster series. But it has low visual impact; it is actually hard to discern the image if you step back more than a few feet from the picture. The painting has never been popular. It was privately owned for a mere three years (between 1991 and 1994). For the remaining 55 years since it was painted, it has been passed from dealer to dealer, making only one appearance in an American museum, in 2003, at the Bellagio Gallery of Fine Art in Las Vegas—hardly an authoritative endorsement.

The $63.4m achieved for the “Carte Blanche” picture was the second-highest price ever achieved for a Warhol at auction. Sotheby's iconic “Coca Cola”, by contrast, sold for $35.4m and Christie's “Big Campbell's Soup Can” for $23.8m. Irving Blum, the Los Angeles dealer who gave Warhol his first solo show, was shocked by the disparity in results. The prices, he affirmed, were “incredibly peculiar.”

Mr Ségalot is resolute. He asserts that there was “no question in my mind that 'Men in Her Life' was the quintessential Warhol”, adding that it is “the most complete picture by far.” Few art advisors have such blind conviction in their own taste.

It is rare for three early Warhols of the same date and similar size to come up for auction three days in a row. Blips and anomalies are quickly forgotten, but art-market experts remain surprised at the price achieved for “Men in Her Life” in the “Carte Blanche” sale. Over the past 15 years Mr Ségalot, bidding on behalf of clients, has been responsible for many high prices. This one may become his most notorious.

 

(This column about the art market originally appeared on The Economist online.)