Issue #213  3/5/2015
Sotheby's Howard Stein Auction Shows Market Twists and Turns

By Alex Novak

I've seen some strange auctions lately, but Sotheby's "175 Masterworks to Celebrate 175 Years of Photography" strikes me as perfectly representing the new vagaries of the market with all its irrational exuberance (remember that term?), but yet had superb bargains and underpriced unsold lots as well. It seemed the higher the estimates and prices, the more the bidding, no matter the "actual" value—whatever that might mean today.

First, we should note that this auction of the late Howard Stein's collection might represent a turning point in the photography auction business—one that the auction business may yet come to regret. It was Denise Bethel's last hurrah, and what a finale for this veteran: a record-breaking classic vintage photography auction that hit well over $21.3 million!

But might it be the last such auction for Sotheby's, or at least might it mark a change in overall emphasis in its photo department? Bethel has now retired from Sotheby's and Josh Holdeman has just taken over the title of Worldwide Head of 20th-Century Design, Photographs and Prints. Holdeman is largely credited--along with Philippe Garner--with orchestrating Christie's move to reshape its photography department into a luxury goods-decorating auction and away from the collector market. Early on this canny move was a financial boon to Christie's, as it blended with an entire upscale marketing approach at the auction house. Phillips' also moved in this direction, although its approach embraced a broader selection of contemporary material.

To learn more about these auction market changes and some of the reasons for these shifts (and it is ONLY the major auction part of the market that has shifted) you should check out my earlier article from June 5, 2013 here:

While that decorator market approach has looked good for a while, it seems to be wearing rather thinly lately with Christie's regular multi-owner sale results trailing the other two major New York houses badly in this area more recently. In this fall's New York auctions, Christie's had its most decorator-oriented photo auction yet. Despite that and maybe because of it, Christie's found itself barely doing half of what Sotheby's and Phillips' multi-buyer auctions were producing. Both the latter auctions had broader, more interesting collector material. Yes, Phillips tends to focus on contemporary more than the other two houses, but the Art Institute's more traditional consignment didn't hurt its totals, and many of its contemporary pieces came from a broader group that were important collector pieces, such as the Robert Heinecken Cliché Vary/Lesbianism, 1974, which set a world's record for the artist at auction at $149,000. Heinecken would certainly NOT be on anyone's decorator artist list, but he is highly important and influential, as two recent major museum retrospectives have spotlighted.

Of course, one or two auction seasons do not make a trend, so we will have to see if the decorator-luxury goods approach will continue to find enough buyers to support it. And, of course, I doubt that Sotheby's or any other house would turn down a collection like Stein's in the future. It is just that the clients for this type of collection are usually quite different than those for the current taste de jour at some of the big auction houses. If you don't have quality vintage material to entice the big collectors on an on-going basis any more, will they be there when you auction off a collection of serious material? And will smaller to medium size collectors continue to buy the traditional material if they feel that the auction market won't support them when it comes time to sell? Will this affect the overall photo market, or will it just become a two-tier market place of dealers and medium auction houses handling this work?

Will the major houses turn down a $5-million vintage collection for a $2-million fashion image auction? That seems to be what's actually happening in some instances.

So, will Holdeman really try to reshape Sotheby's photography department into that high-end decorator market focused on roughly 15 or so photographers, as he did at Christie's? Or will he be so diverted by trying to balance all the other areas under his purview that he leaves the knowledgeable photo department staff, headed by Chris Mahoney in NYC and Simone Klein in Paris, alone to pursue a more balanced--and perhaps eventually more profitable and long-term--approach?

I had a brief conversation with Chris Mahoney about the upcoming Spring sale and he told me that he was very excited by a magical 19th-century panorama by Eugene Cuvelier, so perhaps Sotheby's will remain a bastion of photographic diversity—as long as the quality is there. Chris is well respected by the field, so Sotheby's should continue to draw a broad group of bidders for a broad selection of auction material, if the company so chooses.

But will the bulk of lower and mid-level photography be demoted to an Internet virtual auction plaything, as it is becoming at Christie's, or remain a serious traditional operation here? While the Internet is certainly a growing factor in this field, the results have not been very encouraging for internet-only auctions, which have had horrendous buy-in rates and slow, mediocre pay-up rates. Sotheby's management, as I've reported earlier (See: http://www.iphotocentral.com/news/article-view.php/217/206/1355/0/0/10/archive), has felt that photography would be a good fit for the virtual auction approach.

As I noted in that article, "it will be interesting if Sotheby's, Christie's, Bidsquare or any of the various other competitors can find a way to increase those (sold) percentages to make their auctions enticing enough to consignors. Not to mention getting prices that warrant all the fuss in the first place."

All of this might mean that Denise Bethel has decided to move on at the precise right moment. Going out on a record auction of collectible vintage and quality contemporary material makes all the above repositioning seem pointless and uninspired, compared to the excitement of this interesting collector-driven sale. She is highly respected and will have no problem gaining the trust of high-flying collectors in this market as a consultant if she chooses.

So let's look at that sale itself, which certainly had its own over-enthusiastic moments, as well as its strange disappointments (albeit the latter were in the minority). Stephen Perloff will give you the blow-by-blow account below, but I wanted to delve a bit deeper into what truly was going on here, even though there may be no rational answers in many cases.

This collection of former Dreyfus Chairman Howard Stein was largely shaped by AIPAD dealer Lee Marks, Alice Rose George and Stein himself over several decades. It was diverse and fully historic in its coverage—from 19th century through to contemporary photography. Although billed as "175 Years", the sale only covered 163 years of photography, but still its wide swath of historical coverage was certainly one of the things that made this auction so interesting. Particularly with its 19th-century material, it was somewhat unusual for the big New York auctions, as of late. And such a collection was important as much for its revelatory connections as for its individual parts. Unfortunately many of the buyers here preferred a more simplistic approach to collecting, zeroing in on a single slice of the complexity offered, for example, buying a few American masters of the Stieglitz school.

To be charitable, it might be that the bidders (or their advisors) thought an all-encompassing collection of such historical and artistic breadth would be too difficult to put together today; but I fear that lesser thinking was in play here. A simple lack of knowledge, interest and understanding of the complexity of the development of photography and how it all fits together was more likely why one or another school, type or era was singled out from the rich cornucopia on offer, especially by those using art consultants. Certainly financially it was also difficult for all but the billionaires and near billionaires bidding to buy large chunks of lots here, although even they seemed to focus on specific areas as if they were in a straightjacket.

Sotheby's did a tremendous job of promoting this collection, and set what many of us in the trade at the time thought were rather "reaching" estimates on many of the lots (but certainly not on all of them). I believe the Sotheby's staff was a bit apprehensive about the results prior to the sale, but that only seemed to drive them a bit more to succeed, much like for their Southworth & Hawes sale over 15 years before. The catalogue was beautiful; key photos were brought to Paris and shown during Paris Photo; parties were thrown; a panel session of experts was convened before the sale; highly expensive frames were used to present many of the images; the Sotheby's PR machine went into full gear; and all that remained was for the buyers to bid—and bid they did—or at least their art consultants did for them.

The art consultant is a recent photography auction phenomenon, much like the auctions changing from a wholesale into a retail marketplace. The appearance of consultants and the change in the auction field began to be felt around 2000, along with the increase in photography's value. These two trends can even be said to have reinforced each other. Neither is necessarily bad in itself, but there are often unintended consequences.

It used to be thought that you really needed to know what you are doing to buy at auction. The auctions are still a minefield and they offer little to nothing in the way of guarantees (just read the fine print at the back of the catalogues to see what I mean). But over the last 20 years or so, despite the reality, the larger auction houses have done a very good job of making clients feel that it was not only safe to buy at auction, but that it was somehow a safer place to buy than from an experienced dealer or gallery. Glossy showrooms, slick catalogues, condition reports full of miniscule--and in many cases unimportant—details, and a largely young, attractive and attentive staff all helped seal the deal. The fact that it was mostly good, slick marketing rather than solid expertise on display did not seem to be noticed by the auction houses' new target market: naïve collectors and often equally naïve art consultants.

Some—certainly not all—art consultants have little in-depth knowledge about photography or its history. Many have little real-life international market experience and do not know how to evaluate a given photograph with any degree of complexity. Some are clearly motivated by the amount of commission they can make, going after the most expensive--and often the most overpriced--items without regard to 'value" or even condition of the prints.

Even though they were the exception here, there were a few photographs in this sale that had issues, but still sold for record prices. For instance, the Munkacsi of the Motorcyclist appeared to be a copy print heavily retouched to conceal damage around the throat. Yes, the copy print was made by Munkacsi and is still rare (as was the W. Eugene Smith of Tomoko), but that fact should have affected the value. It didn't seem to on the Munkacsi, which sold at $233,000, which was more than double the low estimate with buyer's premium. It did affect the Smith, which sold for a very reasonable (even for a later copy print) $7,500. The first sold to a young art consultant for a client; the second to a knowledgeable collector.

As I said nearly 15 years ago, "collectors need to consider that it takes an investment in time as well as money. Being an "instant buyer" rarely results in a collection (or even an investment) that provides long-term satisfaction; it is the knowledge gained, the friends made and the rich new visual vocabulary attained that provides that satisfaction. In addition, all of us in the "trade" have seen items sell at auction for multiples over what the same item was priced in a gallery literally down the street. Collectors need to do their homework, or at least work with someone who will."

By the way, that doesn't just mean looking up a past auction price online, but understanding the past and present environment that each photograph sells in and what the real total cost is; knowing the real difference in the prints and their condition, including past conservation even when not mentioned; understanding the concept of a photograph's presence, which can vary tremendously; and knowing what the competition will likely do; and knowing if there are alternatives to the piece at auction in the overall market (and be willing to work with dealers to buy the best).

Even Howard Stein had a bit of a bad reputation with dealers, whom he liked to beat up. There is reportedly a story about how he tried to get the legendary dealer Harry Lunn to give him a bigger discount on an image than Harry was willing to do. After stubbornly refusing to pay the relatively reasonable price, Stein found himself chasing the image later at auction, reportedly paying five times what Harry had quoted him originally.

It's always a bit frustrating for a dealer like myself to hear potential clients say that dealers and galleries are "so expensive" and then to see them at auction pay many times the price they could have bought the same or a better print from those same so-called "expensive" dealers. Admittedly that doesn't always happen, but it happens with enough frequency lately to make you wonder why clients aren't more careful at auction—why they (or their consultants) don't do their homework before bidding.

Dealer Robert Koch once told me about how he had approached the under-bidder on an Irving Penn image at Christie's and offered him the same print that he had just bid on for $30,000 less, only to have the collector brush off the dealer with the comment, "Oh, I just got carried away."

At the Stein auction, apparently there were a lot of bidders who got "carried away." I for one had sold what I felt were similar or even superior prints of at least five lots in this sale for prices that ranged from ½ to as little as 1/10 the price attained in this auction. I joked that one of my good clients owed me a Porsche (and an expensive model too) to make up for the nearly $700,000 difference on one lot! Yes, things were that wacky here at times, and this kind of thing happened not just once or twice.

Why would the vintage 1934 Henri Cartier-Bresson of Carousel Horses buy in at a mere $55,000?
Why would the vintage 1934 Henri Cartier-Bresson of Carousel Horses buy in at a mere $55,000?

You could applaud the top lot, but still shake your head at the insanely high price, none-the-less. Alvin Langdon Coburn's Shadows and Reflections, Venice had been hammered down to Lee Marks at a world auction record $365,900 a decade before. Here it sold for nearly triple that price. A lot of money for a Pictorialist work, despite the well-written verbiage in the catalogue listing.

On the other hand, why would the vintage 1934 Henri Cartier-Bresson of Carousel Horses buy in at a mere $55,000 when it should be worth about $250,000+ in today's market? It sold in a damaged copy over a decade ago for $110,000 just after Cartier-Bresson died and before his market soared in value. And more recent auctions of Cartier-Bresson vintage prints have pushed such rare, early prints up into the $200,000-300,000 range.

Or why would a scarce 1950s print of Cartier-Bresson's Picnic on the Marne only sell for just over $53,000, especially when it sold to Stein at the Met/Gilman Sotheby's sale in 2006 for $96,000, which is certainly much closer to its current worth?

There were plenty of bargains like these in this auction despite the frantic and overheated bidding on other lots. Unfortunately in this sale if you waited until after the sale to get a bargain, you were out of luck, because Stein's Foundation decided not to accept any after-sale bids, despite the efforts of more than a few disappointed people. In fact, it would not have been out of the realm of possibilities that this sale might have sold out had after-sale bids been accepted.

If I had to make a chart with the bids in this sale versus what I thought an item was actually worth, it would be a sharp up-down zig-zag of a graphic. I don't think I've ever seen a sale where there was such a discrepancy and disconnect between values and bids.

These kinds of swings do provide opportunities, but also can have collectors and curators overbidding wildly unless they do their homework first. They are also somewhat worrying. Is the market trying to find new highs, or is it faltering? Hard to say at the moment, especially looking at this sale, which showed extremes on both ends of the scale. Perhaps it is such a one-off auction that trying to make predictions based on its highly erratic results is impossible. But it was certainly two days of excitement for those of us who could attend.

One other comment: while I thought the body of work here was an important and stylish one, I actually preferred the experimental taste and pure gutsy approach of the Thomas Walter Collection over at the Museum of Modern Art. It was an interesting juxtaposition to go first to the opening reception at MoMA and view Walther's very personal eye, and then to compare that to Stein's more refined, but somehow less personal approach over at Sotheby's. Thomas takes and took chances with his choices; Howard, like so many other top collectors, made safer decisions. I know what I prefer to see. When in New York, run over to MoMA for a visit if you want to see part of a truly powerful collection.