Strauss & co - 2017 Review

This year’s report offers a detailed look at Strauss & Co’s performance across its three major fine art categories – Masters, Post-War Moderns and Contemporary – and also includes an assessment of the decorative arts. Strauss & Co’s extraordinary year cannot be viewed in isolation from wealth and art-market trends; this report begins with a consideration of wealth demographics and developments in the auction market. It concludes with a brief survey of Strauss & Co’s educational and social contributions to South Africa’s vibrant art market in 2017. Context is always important South Africa is the largest wealth market in Africa. It is home to 40 400 high net worth individuals (HNWI) whose combined wealth totals US$171 billion, according to Research and Markets. The figure is significantly up from 2015. Collectables, including art, remain a popular way for South African HNWIs to store their wealth. There is unfortunately no independent data available on the performance of South Africa’s art market. The Citadel Art Price Index, an art market report launched in 2011, ceased publishing data in 2016. Rather than proffer a speculative diagnosis of the local market, it is helpful briefly to review global statistics and trends. Estimates of the robustness and performance of the global art market vary. Total global art market sales for 2016, the most recent year reviewed by leading authorities, ranged between US$45 billion (TEFAF) and US$56.6 billion (Art Basel/UBS). The European Fine Art Foundation (TEFAF), a leading authority, estimates that auction sales in 2016 totalled US$16.9 billion, while the newly launched Art Basel/UBS market report places that figure at US$22.1 billion. Whatever the exact value, there was a noticeable decline in year-on-year sales at public auction in 2016 of between 18.8% (TEFAF) and 26% (Art Basel/UBS). It bears noting that the top 10 auction houses account for almost 60% of all auction sales, and the largest 100 cover over 93%. The figures are based on aggregated sales of nearly 30 000 auction houses globally. Asia now accounts for a 40.5% share of world auction sales, according to TEFAF, with China being the dominant marketplace. Auction sales in Europe and the Americas are balanced: Europe attracts 31% of world auction sales, and the Americas 27.5%. Auction sales declined in the US and the UK in 2016, with sales through art dealers now accounting for 62.5% of global art sales. Discretion among buyers and sellers is a key driver of this trend. Caution must be exercised in extrapolating this international data to South Africa. The continent represents a tiny fraction (less than 0.5%) of world trade in art. The practices andmethodologies of the world’s top auction houses, especially when it comes to guarantees and the increasing trend towards privately brokered deals by auction houses, do not apply to Strauss & Co. While the company has brokered private treaty sales, it is not a mainstay of its business. Strauss & Co retains its in an open outcry auction system, supported by in-house expertise in setting pre-auction estimates. It is a tried-and-tested system that has served Strauss & Co and its clients well since the company’s founding in 2009. Early masters remain the gold standard Collector appetite for blue-chip works by JH Pierneef and Irma Stern contributed significantly to Strauss & Co’s bottom line in 2017. Combined sales of Stern and Pierneef alone totalled R91 million, accounting for well over a quarter of the company’s annual turnover. Stern was the top performer by value in 2017. Strauss & Co sold 18 lots by this revered expressionist painter with a combined value of R48 376 524. Pierneef was the second highest earner, generating R42 589 632 in sales from 62 lots sold. 19