I heard a funny story this week, it was from one of the regulars who comes into the gallery. He had visited another Art Gallery in Cheshire, I won't mention the name, but it's one of the big High Street chains of galleries. It's (if you like), the top echelon of the high street gallery. On visiting this establishment, he was told by the salesperson, that he "shouldn't buy art from auction houses because 50% of the artwork that is sold through auction houses is fake". Wow....ok lets dive into that statement. In my opinion, this figure is completely fabricated with little or no mathematical basis. The reason I say this is because this figure is plucked from a 2014 story that was two paragraphs long on Artnet. The story regales how a private company who specialises in the authentication of artwork has found between 70 and 90% of the artwork they look at to be fake. Surely this is the same as a Vet finding 70-90% of the pets they see are sick? This company will only be brought artworks that have most likely been disputed by gallerists and museums as fake and they're trying to get it scientifically justified to overturn that decision. Why would someone with a proper painting with great provenance and paperwork to back it up need to have it scientifically justified?
To me, this figure doesn't hold water. Having worked with auction houses for many years I've bought and sold through both provincial and the major companies in the U.K. and abroad. I find it ludicrous (but not surprising) that somebody will come out with such a blatant exaggeration of the situation. Now, I have no reason to support auction houses, I have very little to do with them these days. But in my art career, particularly in the beginning. I used auction houses a lot because that's what the trade did back then. Back in the 1990s and early 2000s auction houses were where you went to get your stock, as an art gallery.
However, that changed massively when, auction houses shifted the way that they worked, and the way that they sold. They were no longer content with servicing the top echelons of collectors who were spending out millions of pounds on Andy Warhol's, Jackson Pollock's or any of the major works that were available at the time. They wanted a slice of the middle market. This is where we saw a massive shift in the way that auction houses worked. They altered their advertising, they changed their sales tactics, they increased the number of sales that they had during a week to include sales covering many different eras. They added more categories of sales, from prestige watches to toys, cars, rugs, and everything else you could think of.
The main goal was to sell to entry-level collectors, which is the bread and butter of every Art Gallery in the country, and indeed the world. So, with Auction houses taking this new tact, it became increasingly difficult for art galleries to purchase works from them because we were competing on the saleroom floor with our clients. In this situation, there's no way that a gallery can be able to purchase a piece of art at an auction, and then put a profit margin on it, and sell it. That becomes a very difficult thing to do. You're competing with private buyers who will recognise you in the salesroom and bid against you because they know that whatever you're prepared to pay, you will have to add on a percentage markup to sell it in your gallery. So, this is why many art dealers stopped going to auction houses, and they looked for new up and coming artists. This massively changed the art world, because it meant that artists who were trying to forge a living by painting, sculpting or creating in general, suddenly had more opportunities to have their work in top-rated galleries. And this, in itself, caused an increase in breakthrough artists, as well as new movements. All very positive things.
Over this period, auction houses increased many aspects of their businesses, especially their sales, however, one thing they were sure to increase was their markup on services rendered. This usually entails a buyer's premium and a seller's premium, and they're usually around the same kind of percentage. Sellers tend to get hit a little bit more because they add things such as charging you for a photograph or even inclusion in the catalogue.
Although there should be a decreasing necessity for these charges as the amounts of printed catalogues that they now produce will be far less than they've ever historically been. I read some statistics on it recently, believe it or not, Christie's produced over 700,000 articles of printed material year on year for their auctions. They announced in December that they were cutting this number in half for 2020. They said that 52% of Auction buyers bought without having seen a catalogue, whereas 71% of online buyers didn't have a printed catalogue at all. This not only saves them money but helps the environment - I guess everyone wins on this one.
Whenever you buy a piece of artwork from an auction, you have to consider that the cost doesn't end with the hammer price, you need to add 20% plus VAT on whatever it is. Also if there are artist resale rights you will have to pay into that as well. So there's a lot of different things that come into account when you buy at an auction. And as that Cheshire Gallery salesperson said, there is a risk of forgeries through auction houses. I'm not contesting the premise of their statement I'm contesting the percentage. 50% is ludicrous, it may well be the case for certain individual artists, it may be even higher for ones such as L.S. Lowry who we know has been prolifically faked over the years. You can pretty much guarantee that any auction with a Lowry original for sale if it's not got an iron-clad provenance with it, which has been documented and proved right the way back to the man himself, then you are looking at quite possibly, a very precarious investment.
What I will say, is that you are far more likely to run into fakes on the likes of eBay. With auction houses, you can go and visit the seller, you can see the artwork, you can hold it, check the back of the painting, you can see how the paint is applied, you can make educated judgments that this is by the artist that it is purported to be. However, when you buy on eBay, there is no such facility to be able to view the piece, you are buying purely from a photograph, and you have to take a leap of faith that what you're buying is correct. This is not always the case. I've been caught out with one or two pieces in the last 20 years via eBay. I go so far back buying things online I remember when Sotheby's.com was a thing before eBay bought it out. Sotheby's.com was their way of selling lower-end (average price) pieces to collectors. eBay saw it as competition and decided to buy them up before it gained any more traction in the online auction industry.
So, in retrospect, my advice is to be cautious at Auction houses, do your due diligence and by that I mean the hours of research we dealers have to do when we buy something, the years of experience and knowledge we pull on to make an educated decision, using our vast network of experts and the research library that we all accumulated during our careers, all of these things factor into our ability to buy artwork with confidence.
I have had people bring me items they've bought from an auction and are quite proud thinking that they're going to make a lot of money, only to present it to me without provenance or any relevant information. I once had to turn an Auction buyer away from my gallery as he was offering me clearly faked works by an artist that I stocked. The opinion of the validity of those pieces was not solely made by me, but a collective of several other people in the art market who I had shared the paintings with and allowed them to form an opinion, they ultimately agreed that these paintings simply weren't right.
"50% of all items at Auction are fake"?
There will be a percentage number for that statement, but I never put faith in a rounded percentage figure, and knowing the market the way I do I can say with confidence, that this statement is heavily loaded. You take a risk when you buy from auction or eBay or anywhere. The key is to mitigate that risk by using people with experience and knowledge, professionals who have put their money and lives into the art world, and to do your own research.
All Images are mine unless otherwise stated. All opinions are my own and not De Lacey Fine Art Ltd or any other company or body.
Auction Houses and Forgeries - G Farmer 2020 © Copyright