Behind the scenes at Sotheby’s: cover story
Sales of the century Christie's and Sotheby's go head to head this week with auctions of impressionist and modern art. The winner is expected to set a record total for a London sale. Rebecca Rose goes behind the scenes at Sotheby's to find out what goes into staging such blockbuster events and how the houses woo the wealthiest collectors.

Financial Times, 17 June 2006

This week, London will be hopping with excitement ahead of the summer sales. Not sales where prices get knocked down but ones where they keep rising. Sotheby's and Christie's, the two rival goliaths of the auction world, go head to head on Monday and Tuesday with their biggest events of the summer - the impressionist and modern art evening sales.

The two sales are the biggest both auction houses have staged in London. Given how hot the art market is right now, there is every chance that one of the two competing giants will fetch a record total for a London auction.

This may seem like risky speculation, given how unpredictable auctions are, but it is based on a carefully calculated pre-sale low estimate for the evening sales, which is almost always exceeded on the night. For both houses, these estimates - derived from the quality of the works, the strength of the market and the achievements of the last sale - are astoundingly high: £64m for 56 lots at Sotheby's, and £70m for 100 lots at Christie's. In the February sales in London, Sotheby's edged ahead with a total of £68.7m compared with Christie's £62m, achieving the highest sum at auction in the capital since the great boom of 1989 when Sotheby's fetched £68.8m from a sale. For the second time this year, both are battling frantically to be market leader in the lucrative impressionist and modern art field.

The auction world has long been dominated by the warring duopoly that is Sotheby's and Christie's. When the market is as ripe as it is now, both try to get their share of the action - and at the same time feign indifference over what the other is up to. Though they are driven by this competition, when I talked to spokesmen from both, they would barely register the fact that the other was holding a sale at all. This comes as little surprise: the notorious legal scandal of 2001, in which Sotheby's and Christie's were accused of an international price-fixing conspiracy, resulted in a huge fine for Sotheby's and the year-long imprisonment of its chairman Alfred Taubman and led to the need for both houses to disassociate themselves publicly from one another. After the court case, the competition increased. It has now reached a fever pitch thanks to the steady build-up of the market's buoyancy over the past few years.

Today's heady climate can be attributed to several factors but the buzz comes from new collectors in emerging markets such as India, China, Latin America and Russia. These new collectors are keen to muscle in on the European art scene as well as buying up their own country's art (particularly through Bonhams, Britain's increasingly prominent third auction house, which is now snapping at the edges of the duopoly and specialising in contemporary and ancient sales of Chinese and Indian art). While old master potential has been thoroughly mined, the impressionist and modern art field is still a growth area and new money is being funnelled directly into it. There is a reason for this. Certain artists – Picasso, Van Gogh, Monet, Cezanne, Matisse, Degas, Modigliani and Chagall – form what those in the know refer to jokingly as the "blue-chip brigade", which commands the highest prices and biggest international interest. Equally, the blue-chip brigade is owned, sold and bought by only a handful of the world's wealthiest buyers - and collectors from emerging markets are eager to join this exclusive club. This competition for a relatively small number of artworks pushes up the prices, which makes the acquisition of these works by one or other auction house all the more crucial and encourages them to think of more ways of enticing the seller in their direction.

The blue-chip brigade is well-represented at next week's evening sales and is already attracting wealthy buyers like a rib-roast attracts flies. One of Christie's star lots is a little-known Cezanne of 1881, "Maison dans la Verdure", estimated at £3.5m-£4.5m, while Sotheby's has an iridescent Degas pastel of 1895, "La Sortie du Bain" at £4.5m-£6.5m. Both sales boast stunning Renoirs and several works by Picasso from across his long career - each has a 1901 painting and late works from 1969 (Christie's) and 1963 (Sotheby's). The top lots in each sale are a focal point, partly because they each have an intriguing story behind them. Christie has an Egon Schiele from 1914, "Herbstonne", an angular, haunting floral landscape that had been missing for 60 years and is estimated at £4m-£6m. Sotheby's 1919 Modigliani portrait of his muse Jeanne Hebuterne, painted just before they both died only two days apart, shows a delicate, swan-necked creature who stares out of the painting with one hand raised demurely as if to object to all eyes being on her and her £8.5m-£12m price tag.

The acquisition of these works is where the crux of the competition lies, as a big sale depends on having big works. To woo sellers, the two houses push the boat out to show they will go to every length to attract the greatest interest from the richest buyers and, ultimately, to command the highest price for the work on the night. When I was invited behind the scenes at Sotheby's, I jumped at the chance of an exclusive insight into pre-sale strategy.

The two people who are pulling it all together at Sotheby's headquarters in New Bond Street are Melanie Clore, deputy chairman of Sotheby's in Europe and co-chairman of the impressionist and modern art department, and Philip Hook, board director and senior specialist in Europe. Although there are several other experts, and a total of 21 in the department, Clore and Hook are evidently the driving force of the department. Clore, vivaciously elegant in a navy, broderie anglaise dress by Prada, has worked at Sotheby's for more than 20 years and in 1990 became the first woman to conduct an impressionist sale. Hook, debonair and silver-haired, has 30 years experience in the art market and previously worked for Christie's. He is also a picture expert on the BBC's Antiques Roadshow and writes novels based on the art world. As you would expect, they are both faultlessly charming and well-spoken but, equally, they don't beat about the bush.

Behind the green baize door of Sotheby's famous showrooms, and up a rather unprepossessing staircase, lies the spruce, white-walled impressionist and modern art department. Observing the large windows looking over New Bond Street and a few minor works from the forthcoming show casually hanging in the corridors, it's no surprise to learn that this department brings in approximately 40 per cent of Sotheby's turnover.

Hook and Clore are in contact with potential sellers and buyers all over the world throughout the year – not just in the run-up to the pre-sale. But it is after February that the work on the June sale begins in earnest, when the engine rooms at Sotheby's – proposals, marketing, cataloguing, insurance, shipping, security, legal, restitution, press, events, communications – crank up a gear. It is often off the back of the success of the earlier sale that Hook, Clore and all of Sotheby's global experts persuade sellers that now is the time to strike. This is particularly the case this year, given the astounding success in February – and the crucial fact that it was a few million ahead of Christie's. "We need to communicate to our audience the fact that this is a great time in the market to sell and that people who have really great pictures should seriously consider doing so now. That is our priority," explains Clore.

After February the team, as well as their delegates around the world, begin an intense six-week period of "gathering pictures". The process of contacting and targeting potential sellers is an intense one that maximises all forms of communication from old to new – letter-writing, visits, telephone calls and
e-mails. Clore and Hook make this sound effortless but it is, in fact, a tense, competitive stage in the proceedings when collectors are making key decisions – to sell or not to sell, to sell with Sotheby's or to go through its rivals, or increasingly, to shun both houses and their rising fees in favour of selling directly through a private consultant. But how do the houses know who they should approach and when? "We stand or fall by the extent of our knowledge of who owns what," Hook says.

Particularly important are the relationships that Sotheby's has built up with prestigious collectors over years and even decades. At times, the auction house knows "who owns what" even better than the collectors' families themselves - and this evidently pays off. It is often the case that wealthy families who have owned valuable collections for several decades would be faithful to the "family auctioneer" rather in the same way as they would to the family doctor, accountant or lawyer. Often, people are forced to sell their paintings due to circumstances that have nothing to do with the buoyancy of the art market, such as death and divorce. "Selling paintings is often a time of sadness and upheaval," says Clore, who has recently secured the sale of the prestigious Dugan-Chapman collection for the Monday show. Charles and Mary Dugan-Chapman had built up a staggering collection of impressionist and modern works since the 1980s. They both died recently and their children are now selling. When I express surprise that anyone would sell such treasures, Clore says: "People don't always have the same taste as their parents, do they?" Clore herself worked closely with the Chapmans and their collections for 20 years and now that relationship is coming to fruition.

When it comes to the content of a sale, can you ever have too much of a good thing? Is there such a thing as too many Picassos, say? "The amazing thing about Picasso is that he is not just one artist. He is several. One can therefore have more Picassos in a sale than almost any other artist," says Hook.

But, even with Picasso, the need to be selective does arise. "It is not in our interest to have pictures competing with each other in the sale. But there are certain artists who are very in demand at the moment. Chagall and Picasso, for example. So we try very hard to get examples of those artists from different periods of their work."

At a frenzied time like this, when there is a lot of important art going on the
market, the auction houses can afford to be selective, often preferring to have a smaller amount of quality lots than a huge inclusive sale. This way, when Sotheby's fills its Picasso quota, it can be an advantage to Christie's, which may scoop up what the other has missed or rejected, or vice versa. This selectivity goes some way to explaining how it is that both houses manage to have such high calibre lots at the same time. It is also the case that the two houses' strategies are very similar, especially given that employees often switch from one to the other these days so very little remains secret.

Before a sale can be fully mapped out, the sellers need to sign on the dotted line by a certain date. First, they need to be persuaded that the auction house will pull out all the stops to assure the highest price. The houses sometimes put together a lavish hardback proposal that includes a tantalising list of the other high-profile works already signed up to show that the seller's work will be in good company. It lists what the auction house plans to offer in terms of marketing, global promotion and pre-show exhibitions, and the estimate and reserve price - any picture not reaching the reserve remains unsold. It also talks about its track record, how much an equivalent Bonnard went for last year, for example.
Sometimes auction houses even offer to have a photographic replica made of the artwork - printed on to canvas and touched up with paint – so the seller need not feel too bereft about severing all links with his beloved Monet, for example. Last but not least, the proposal lays out facts and figures about how well the auction house has performed compared with its rival.

At times, when the auction house is particularly set on a work, it will offer what is known as a "guarantee" to the buyer. This is an agreed figure that the auctioneer guarantees to the seller - if the work does not reach that price at auction, the auction house must pay up. This is very risky, especially at a time when the market might conceivably turn, and a procedure that neither Sotheby's nor Christie's is keen to talk about.

Once the agreement to sell is sealed and the artwork is delivered to Sotheby's, Clore, Hook and their team begin the process, six weeks before the sale, of putting together the catalogue. Ten thousand copies are printed and no expense spared when it comes to the colour plates and fold-outs. Most important is the way in which the document is laid out, particularly the question of which lot should go where or when, as the sale follows the order in the catalogue. Designing a sale involves elements of staging and choreography - the pace and mood of the sale are dictated by the sequences of lots. So how do they choose where to begin? Monday night's sale opens with two sunny works by Bonnard. "You start with the things that you are optimistic are going to sell well," says Hook. "Something that will give a good feeling to the sale." But when do you slip in the first Picasso or the Modigliani? "You don't start too early with a major thing. Spread out the heavy hitters," he continues. "If you have several works by one artist, it makes sense to have the best first. Frustrated under-bidders can then keep their powder dry for the next best, and so on."

The Sotheby's team must also nurture the buyers. To whet appetites, highlights from the auction are packaged up and flown around the world to star in a series of temporary exhibitions that allow collectors in other countries to get a glimpse of the goodies ahead of the sale. At Sotheby's lucrative May sale in New York, there was a show previewing the June event. Getting overseas buyers involved is important. At the February London sale, the US accounted for 11 per cent of buyers; the UK 26 per cent; Europe 52 per cent; the rest of the world 11 per cent. Works are flown to other important art centres such as Japan, Germany and France. "Paris is still incredibly important to Sotheby's," says Hook. "By origin we're English, we're owned by Americans but we are powered by French art."

Occasionally, a single painting will go to a collector who has expressed strong interest so that he can see how it looks on his wall. "One is not going to sell the picture by putting a commercial on TV about it," Hook says jokingly. "It is not a mass market. It is a market of about 20 people in the world." Buyers often wish to remain anonymous so sometimes a private visit works better than a dinner with other collectors.

At times, if a work is too delicate to go in the hold of an aircraft and is small enough, it will occupy a seat of its own next to a Sotheby's chaperone. This year, the Feininger canvas made a flying visit to Hamburg; it also made the cover of the sale catalogue – a statement of intent the sellers will doubtless approve of. Similarly the Modigliani made a transatlantic dash so it could temporarily grace the wall of an American collector.

Christie's offers a similar package to the buyer so its top lots have been picking up air miles as well. "Illustrations of paintings are nothing compared with the painting itself," says Olivier Camu, director of Christie's impressionist and modern art department. "The buyer has to understand the magic - and he or she has to begin a relationship with the work of art."

Both Christie's and Sotheby's arrange dinners and receptions around their temporary exhibitions, which are instrumental in stirring up excitement in the sale and keeping sellers happy. In a sense, when a rare Picasso or Cezanne is in town, it is not unlike a state visit, or an A-list celebrity flying in – the social events are unashamedly exclusive and high profile.

Right now, in the height of pre-sale excitement when all the works in the sales are up on the walls for viewing and when both auction houses are vying for the attention of the rich collectors in town, the wining and dining steps up a notch with parties, dinners and press days.

This week, the extent to which Sotheby's and Christie's are neck and neck will be self-evident: there will be an equal buzz at each auction house on the night of their sales, an equally glamorous wealthy set in attendance and each sale will, in all likelihood, exceed the low estimate quite substantially. But only one will be crowned market leader of the blue-chip brigade in the UK. The official line from each auction house is that it doesn't really matter whose sale has a bigger total. "It is far more important to break records for individual artists than for the overall sale," says Camu. It is hard to believe that this attitude is entirely genuine, given the entire industry is driven by competition and that there is a chance for one to break such an important record.

But equally, there is perhaps a latent feeling of not wanting to count chickens. This boom-time might remind those who were around at the time of the crash that followed the last big art market bubble of 1989/90. While Sotheby's and Christie's may well be subtly scanning the horizons for gathering clouds, they are at the same time seizing the day for all it's worth.