COMPETITION between major auction houses for the top end of the market is intensifying, with Menzies Art Brands' executive chairman Rod Menzies planning to sacrifice volumes for margins and expand to the primary market, despite the depressed retail and investment environment and onerous rules deterring some superannuation funds from investing in art.
Menzies, whose second sale for the year is in Melbourne tonight, will reduce his four stand-alone auctions each year to three to coincide with the Sotheby's and Deutscher and Hackett's sales as they are, he says, "his only competitors".
He will also slash the number of lots for sale by half and only list works worth more than $80,000. His aim, he says, is to have more time between auctions to acquire the work of artists such as Brett Whiteley, whom he describes as "a centre of gravity in the secondary market now".
Menzies will also target contemporary artists from the primary market for the sales, arguing "that with many private galleries closing, more established contemporary artists are ascribing to sell their work through us. It's a megatrend."
Works valued at less than $80,000 will be sold from 2013 through his company, Lawson Menzies, which will hold four auctions each year and target single-owner collections. At present, Lawson Menzies sells works from $1000 to $40,000 three times a year. Its $1.5 million turnover per sale will rise to $3.5 million, he predicts.
But the top-end market, while lucrative, is small, as tonight's catalogue reflects. While 19 of the 140 lots have $100,000-plus price tags totalling $8.7 million, 29 lots (21 per cent) have $40,000-$100,000 estimates, 31 (22 per cent) $20,000-$40,000 estimates and 61 (44 per cent) $20,000 or less.
Deutscher and Hackett's first sale for the year last month achieved a record price for Arthur Streeton's 1888 Settler's Camp at $2.5 million but more than 85 per cent of the 162 lots were on offer for $30,000 or less. Yet later last month, prices for Sotheby's major works were realised despite criticism that it was pitching them too high.
Tonight the spotlight will be on Whiteley's 1985 oil, photography and mixed media on plywood Sloping up on the Olgas (1) (With Crow) and Jeffrey Smart's 1971 Holiday, both with $1 million estimates.
Can the supply of and demand for premium works keep three main players alive? Bonham's head, Mark Fraser, formerly a Sotheby's director, is also chasing the top-end market. Paintings in Bonham's May sale averaged $85,000, he said.