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Sotheby's and Christie's Report Record Russian Art Sales in 2007

Y. Kugach               1956               Thoughtful Woman
By John Varoli
 
Jan. 11 (Bloomberg) -- The world's top two auction houses, Christie's International and Sotheby's, profited from an expanding Russian economy with its growing ranks of newly rich collectors to score a record year in Russian art sales.
 
Their combined 2007 global Russian sales totaled $324.9 million, up 45 percent from a total of $223.6 million in 2006. All figures include buyer's premium.
 
After an economic and financial crisis in 1998, the Russian economy has expanded in each of nine consecutive years, in large part due to the export of commodities such as oil, natural gas and metals. A growing class of wealthy Russians is eager to acquire luxury goods, such as fine art.
 
"The demand for Russian art remains very strong, especially due to the appearance of new Russian collectors," said Alexander Gertsman, a New York-based dealer of Russian contemporary art, in a telephone interview today. "Every year more Russians start collecting art, which means more bidders at auction, and this competition helps push prices higher."
 
Sotheby's, the market leader in Russian art for the past decade, said its 2007 total grew 18% to $180.9 million. Christie's said its 2007 Russian art total increased 87% to 71.2 million pounds ($144 million).
"Christie's annual total has risen four-fold since 2004."
"A focus on the top end of the market in terms of both buyers and great artworks helped make 2007 our best year ever for Russian art," said Jussi Pylkkanen, president of Christie's Europe. "It also helped that we brought excellent artworks to exhibit in Russia, and worked hard to build relations with the country's top collectors."
 
The Rothschild Faberge Egg was Christie's main Russian attraction in 2007, selling on Nov. 28 for 8.98 million pounds. This was the most expensive item ever sold at a Russian art auction.
 
Sotheby's 2007 total didn't include the September sale of the Rostropovich Collection of 19th- and 20th-century Russian art bought by billionaire Alisher Usmanov three days before the auction was scheduled to take place. Usmanov later told Russian media that he paid about 40 million pounds for the collection.
 
Sotheby's annual Russian results have risen more than 22- fold since 2000 when its total was $6 million. In 2006, Sotheby's total was $153.6 million.
 
"It's been the best year we'd ever had, and had the Rostropovich Collection been included then our final results would have been much higher," said Jo Vickery, head of Sotheby's Russian art department in London.
 
Sotheby's has three Russian art sales a year, with a winter and summer sale in London, and a spring sale in New York. Since 2006, the auction house also has an annual late-winter Russian contemporary-art sale in London.
 
Christie's annual total has risen four-fold since 2004 when it reported Russian art sales of 13 million pounds ($23 million) on two annual auctions. Since 2006, Christie's has three annual Russian auctions: a winter and summer sale in London, and a spring sale in New York. Its 2006 Russian art total was 38 million pounds ($70 million).
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Revelation in Colors

V. Zabelin               1999                Sunny Day
(Excerpted from the book Zabelin: Master of Color, now available through Lazare Gallery)
 
It is not by chance that time has preserved the words of Epiphany the Wise in remembrance of the great Theophane the Greek: "He is a painter among the icon painters." Likewise, Russian culture had always considered that the ability to depict a perfect image of the world with artistry is of the highest value and of utmost good. Without diminishing the value of many great masters, those who are able to grasp and depict on canvas the never-ending changeability of the color harmony around us are especially admired. Their works leave us standing in awe to experience their mystery rather than to understand them through the mind.
 
Vyacheslav Nikolaivich Zabelin was particularly gifted with the rare ability to see light and color in the non-abstracted beauty of objects. His creative work is of great importance to the culture of Russia because of its place in the history of the Moscow School of Painting. In order to understand Zabelin as an artist it is necessary to remember the origins and underlying values of the Moscow School.
In order to understand the essence of Zabelin's creative work, it is necessary to understand that he is historically inseparable from Moscow and the Moscow State Academic Institute of Art named after V.I. Surikov.
Striving to become part of Western civilization, Russia cut a window in Europe by building St. Petersburg as its head of reason. On the other hand, Moscow kept the old ways of Russian life and was its heart and soul. Rivalry between the young and old capitals has given birth to many Russian cultural events for the last two centuries.
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O. Svetlechnaya          1992          Birches
For serious art collectors and investors, news of the explosion of interest in Russian Realist art has been unavoidable. Consider the Sotheby's experience:

In April 2007, Sotheby's in New York ended its most profitable sale of Russian art in its history. In raising $46.7 million, the auction house broke its own sales record, set in London six months earlier, when its Russian art sales netted $38.4 million. That exceeded its previous Russian sales record of $35.1 million. The 180 paintings in the Sotheby's sale earned $32 million. By midyear, the house had seen earnings of more than $107 million from Russian works alone.

At the Sotheby's April sale, "Solomon's Wall," by the 19th century Russian Realist Vasily Vereshchagin, sold for $3.6 million.

The work of Moscow School painters "is one of the fastest-growing markets we've ever seen," Mark Poltimore, deputy chairman of Sotheby's, reported in May 2007, at a viewing of their paintings coming up for auction at Sotheby's in London.

Christie's, meanwhile, has been breaking its own records. In the first half of 2007, the auction house sold $69 million worth of Russian art, almost equaling its $70.5 million in sales for the entire previous year. All told, Christie's Russian art sales have increased more than sevenfold since 2000.

"Russian art is one of the fastest-growing markets we've ever seen."
-Sotheby's
Russian Realist art, it is now clear, represents an attractive investment for both collectors and investors. This school of beautifully conceived and masterfully executed works of genre, landscape and portrait painting has never appreciated faster. "Auction houses report record sale prices," Fine Art Connoisseur reports.

"This is unprecedented in the modern age," according to the Financial Times. Not "since Diaghilev's Ballets Russes in pre-war Paris have the splendour and triumphant difference of Russian art hit the West so exuberantly."

Russian art is "hot" for several reasons, all of them good.

First, finer paintings have always been and will continue to be a sound investment, regardless of external conditions. But the conditions now are especially favorable. Investing in Russian art represents a hedge against a sinking dollar, portfolio diversification and protects against global currency debasement.

Second, and more specifically, the works of the Moscow School Realists are of surpassing beauty and, being representational rather than conceptualist or abstract. They possess immediate and timeless appeal.


A. Fomkin        1995        Phloxes
Third, they have only recently been discovered by the West and recognized for their superior quality. This - see below - will increase their demand in coming years.

Finally, the revival of the Russian economy itself has led to increased demand among Russians and among Russian expatriates for representative works of their own countrymen.

As Fortune reported in May 2006: "Sotheby's has identified a large group of rich Russians - newly minted centimillionaires and billionaires - who own much of the wealth in the country and by all appearance are clamoring for artwork."

As the London Independent observed the following month: "The new-found wealth of Russia's elite is having a major impact on the international market for the country's riches." After a steady climb in prices, "the cost of art has taken off in the last three years."

The demand is so great that Christie's and Sotheby's have opened Moscow offices, simply to explore and understand the phenomenon. (Auction houses are forbidden by Russian law to export paintings.)

The rediscovery of Russian Realist art is a compelling story in itself. After being driven underground in the years immediately after the Bolshevik Revolution, these painters persisted in near-anonymity.

This anonymity ended, however, when Soviet officials, eager to showcase the achievements of the Russian people, sought to establish the greatest art schools in the world. To this end, they recruited the realists as instructors and students. The goal was to create new generations of Russian painters who, at a time when most of their European counterparts were experimenting with modernism, carried forth the traditions of the greatest artists of the past.

The extraordinary work of these painstaking artists went on almost unnoticed in the West, which, throughout the Cold War, remained blinded to the achievements of the Russian artists. Aware only of propagandistic Socialist Realist works, Western observers believed Russians capable of producing little more than mock-heroic kitsch. During the Soviet era, the only international market for Russian art was primarily works of artists who had fled the country.

The resulting ignorance of the realities of Russian artistic achievement, lamentable as it was, had an ironic and unintended consequence. With the fall of the Soviet Union and increased communication between Russia and the West, Westerners came to appreciate the artistry of the Russian Realists and the extraordinary quality of their work.


N. Ulyanov         1950's         House
At this time, a familiar process began to unfold - a process that art investors have witnessed with the rise to prominence of the French Impressionists, the Luminists, the Hudson River School, the Barbizon School, and others.

After an initial decade of discovery, marked by scholarship and limited collecting, comes one of more intensive acquisition, characterized by museum and gallery exhibitions, mounting media attention, the publication of books, major auctions and collecting at all levels.

Within the second decade - the point at which the market for Russian Realist paintings appears today - the value of the art begins to climb precipitously, and demand for the highest quality work soon soar.

With the Russians, however, something else has happened to stimulate the demand for Russian art works. As noted, the Russian economy itself has boomed, resulting in a rise in the number of wealthy Russian businessmen. The number of Russian billionaires, for example, increased from seven in 2002 to more than 50 in 2007. Russia today has more billionaires than any country in the world except for Germany and the United States.

Returning to the traditions of pre-revolution Russia, those Russians with the financial means to become art collectors, have begun to purchase paintings for which there was scant demand in past decades, restricting the supply. As has also happened with other suddenly desirable styles of art, the demand for works of genuine distinction has skyrocketed.

Lazare Gallery enjoys unparalleled access
to the Russian art world
Here again, the timing for investors in Russian Realist art is auspicious. Works by far better-known but no more distinguished Western artists still sell for many times more than those of Russian artists. As the quality of their work become more widely recognized, prices for their finest paintings will reach comparably high levels.

"The emphasis now is shifting to works of higher quality," The Art Newspaper reported in July 2007. Alexis de Tiesenhausen, international director of Russian art at Christie's, says that future growth "in this market will come from high-quality works. It's much better to have a small scale with works of high quality than quantity."

It is precisely these works of distinction that Lazare Gallery searches out and secures through its deep personal relationships with Russian artists. Jonathan Wurdeman, son of Lazare owners and founders, John and Kathy Wurdeman, is himself the only American graduate of the Surikov Art Institute in Moscow.

A resident of the Republic of Georgia, Jonathan has been invaluable to the gallery in making introductions to the master painters of Russian Realism. (The gallery itself is named for the founders' grandchild, Lazare, Georgian for Lazarus.)

As a result, Lazare Gallery enjoys unparalleled access to the Russian art world. Among their friends and associates are many high-ranking art union artists, owners of Russia's finer galleries, owners of Russia's auction houses, directors of Russia's greatest art institutes, Surikov professors and graduates. Honored by Russian museum directors, we are known and respected by the greatest painters themselves. Because of this intimate knowledge of the painters, their works and the market in which they operate, we have a successful history of predicting which painters and paintings will be in greatest demand.


I. Sorokin        1952       Port Igarka
The painters themselves have learned from experience that Lazare Gallery understands and appreciates their work and is committed to handling only their best paintings.

"I am 68 years old and until now never has my family worked with a gallery that purchased only our finest works," says Mikhail Kugach, artist, former chairman of the Russian Artists Union, former director of the Moscow Art Institute and former president of the Moscow River School. "Many galleries want to represent our name and desire what we will sell them for the least amount of money. I like working with Lazare Gallery. They recognize and believe in distinctive quality."