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How Surging Inflation Is Impacting Art Galleries – Artsy

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The prices of U.S. consumer goods hit a staggering 7% annual increase this week, marking the fastest rate of inflation in four decades. The precipitous rise in costs of food, fuel, and energy alongside more disconcerting factors including rent and wages over the past 12 months suggests that the trend upwards may not prove transitory, as supply chain upsets, high demand, and increased consumer spending—among other factors—continue to erode the purchasing power of the dollar.

What implications, if any, could this indicate for the art market?

While an exact correlation between the art market and inflation is difficult to parse, as art is a sentiment-driven asset tied to surplus wealth, history suggests that the price of art sold at auction does tend to increase during periods of high inflation. However, inflation’s direct effects on the pricing of work sold on the primary market are typically even less quantifiable.

The current surge in inflation comes as we witness record highs at auction and rampant sell-through rates across the primary market. Such conditions can be attributed to a cocktail of contributing factors, including the rapid minting of new ultra-high-net-worth investors, low interest rates, an increase in digital sales, and demand that outweighs supply.

Essentially, the circumstances influencing the art market at present are atypical, leaving ample room for speculation.

Madeleine D’Angelo is the founder and CEO of Arthena, a financial technology firm that leverages quantitative-driven pricing methodologies to execute strategies and financial products within the art market. She explained that while primary-market data is not as robust as auction market data due to a lesser degree of pricing transparency, Arthena has created a variety of indices that incorporate both markets’ results to understand the correlation between art and other asset classes, including insights on how art performs during periods of inflation.

“What we’re seeing right now within the primary market is that there’s a scramble, and people are just looking for inventory,” said D’Angelo. “They’re paying top of the market prices for the pieces that they are acquiring, because they are just happy to acquire those pieces.” She indicated that the current trend suggests an irrationality in buyer behavior, specifically in terms of the astronomical prices being fetched for several emerging artists, making data analysis difficult to quantify. Ultimately, however, she surmised that “as long as ultra-high net worth investors continue to grow in both size and volume, I think they’re going to continue pouring money into the art market. I don’t think that trend is going to stop anytime soon. And I do think that for primary sales, it means that people are happy to buy at the top of the market to get the inventory.”

With a frenzy of new money entering the primary market and a continually growing number of new collectors, gallerists are pressed to protect and ensure stable market growth for their artists. Selling an artist’s work for too high a price from the outset could create a bubble and prove detrimental to the artist’s market down the line. For established galleries representing blue-chip artists, maintaining relationships with longstanding clients is an additional factor that takes ample precedence over making a quick profit in the short term.

“The phenomenon at auctions seems, at its root, to be driven by the rich having even more expendable income to cause price rises for in-demand artists, rather than directly reflecting the basic economics of inflation felt by most Americans,” said Marianne Boesky, founder of Marianne Boesky Gallery in New York. “While that fact remains, the primary pricing structures created and managed by galleries do not ebb and flow according to supply and demand. We generally want primary pricing to correlate to each individual artist’s career trajectory.”

Boesky continued, “A demand-driven market doesn’t mean a whole lot for the primary-market prices of artworks if we are to keep our heads on straight.”

However, as is the case with many businesses, inflation does impact a gallery’s day-to-day operating costs. Boesky added that “the word inflation came up in our most recent staff meeting for the first time I can recall in 25 years.…The raw facts are that the costs of artists’ materials have risen, the costs to transport artworks have risen, the cost of every link in the chain of our business from the art supply store to delivery of a work to the client has risen.” To account for this, the gallery is in discussions to potentially implement a 10% increase in pricing across the board—which would be “practically, if not totally unnoticeable,” said Boesky, and it would not be on nearly the same scale as the record prices seen in other areas of the market.

“Prices are going through the roof—the prices of materials to crate artwork, the prices of moving artwork, the prices of transport, the prices of shipping—everything is significantly higher,” said Sean Kelly, founder of Sean Kelly Gallery in New York. “So one has two options: Jack the price of the work, or suck it up and deal with it—which is what we’re doing.” He explained that in his 30 years of experience, taking a long-term approach to economic fluctuations is imperative.
Supply chain issues have had an impact on galleries in other ways, as well. “We’ve certainly experienced delays in production from artist studios,” said Tina Kim, founder of Tina Kim Gallery in New York. “From canvas stretcher bars to sculpture raw materials, there have been severe delays in the delivery of goods. Shipping has been difficult and congested, and we’ve taken great measures to plan for art fairs and exhibitions.”

Kim continued, “Regardless of inflation, I’ve experienced a high demand for works, and that has factored into a price increase of our artists. It’s been challenging to secure inventory with the increase in demand. Our client base has expanded significantly since the onset of COVID-19, and we’ve undergone significant restructuring within the gallery to account for our online sales and inquiries.” She explained that the price increases have been calculated in order to maintain steady market growth. “One has to be very cautious when increasing artist prices,” said Kim. “Given the international nature of the market, since we are working with a broad audience, I feel confident with pricing and believe what I set to be healthy.”

However, the prices for works by emerging artists seen in other areas of the primary market suggest that not every dealer is taking such precautionary measures. While increased demand paired with short supply supports a bullish market poised for continual growth, if prices—particularly for emerging artists—skyrocket too rapidly, their market worth could take a downturn as they hit the secondary market.

Commenting on the prices and sell-through rates for young artists recently witnessed at major art fairs such as Art Basel in Miami Beach, Kelly warned that such valuations based on speculation could prove unsustainable, and the “people who push prices may lose money, while the artists they were gambling or speculating on are going to be really damaged.”

He said, “We are not pushing our younger artist’s prices through the roof…we’re not creating bubbles, we’re not speculating.” Kelly explained that these practices can be “really potentially counterproductive” for all parties involved.

So how can collectors best navigate the current market?

While buying art can certainly prove financially viable in the long term and beat inflation, it is vital for new collectors to make informed decisions on the works they’re acquiring, rather than adhering to trends.

“It’s always dangerous to buy art with speculation, and it’s important not to get caught up in the excitement,” said Kim. “I think if you follow the money, you can easily make mistakes. Art collecting is a true passion and lifestyle. There is good, exciting art at all price levels. It’s not something to invest your life savings in; I would never advise someone to invest in art. With a good, careful selection, you get to live with works you enjoy and your value in art will continue to go up.”

Sibylle Rochat, founder and director of London-based art advisory firm Rochat Art Consultancy, emphasized that “quality is king”—especially in a bullish art market, as we are seeing now—and collectors ought to be wary of jumping on trends without doing the research.

“Right now, anything and everything sells,” said Rochat. “So when a correction hits, all of the works that are not of high quality will disappear.” She explained that the art market goes through cycles, and certain works will fall out of fashion during periods of recession, lowering the price considerably.

While the current circumstances surrounding the art market are unique and the trajectory of economic factors remains to be seen, it’s important to remember that the art market will always go through cycles. “During periods of recession, even the wealthiest people are psychologically impacted by their paper losses, and they tend to pull back from spending on collectibles,” said Boesky. “These periods see collectors spending less, but not selling their great material into a soggy market. If they can afford to hold the art they love, they do.”

Although the outlook of rising inflation rates and its effects are unclear, building an art collection ultimately holds the same principles as ever: Buy what you love, do your research, and avoid getting swept up in trends.

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Art heist at Kelowna gallery takes four minutes – Vancouver Sun

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The stolen sculptures included bronze, stone, and glass pieces. Altogether, the pieces weighed more than 300 pounds.

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KELOWNA — Art thieves were in and out of a Kelowna gallery in four minutes early Saturday morning, stealing 11 sculptures worth almost $70,000.

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Two masked men broke into Gallery 421 in the South Pandosy business district, triggering an alarm at 1:58 a.m. They fled at 2:02 a.m., according to a surveillance camera.

“It was most definitely targeted. They knew exactly what pieces they wanted to steal,” gallery co-owner Kelly Hanna said Monday. “They were fast, but their movements were deliberate. It wasn’t helter-skelter.”

The stolen sculptures included bronze, stone, and glass pieces. Altogether, the pieces weighed more than 135 kilograms.

“We’re going to put the word out to other galleries, pawnshops, and art houses about what was stolen,” Hanna said. It’s most likely the thieves will try to sell the pieces outside of Kelowna, either in Vancouver or the U.S., she said.

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One thief was 5-foot-10, medium build, and wore a grey hoodie. The other was 5-foot-6, also of medium build, and was wearing blue pants with white runners.

The stolen pieces included works by artists Vilem Zach, Michael Hermesh, Vance Theoreet, and Jeff Holmwood.

Hanna and co-owner Ken Moen are offering a $1,000 reward to anyone providing information with police that leads to an arrest.

Hanna and Moen bought the gallery, which opened in 2001, two years ago. Hanna said there have been smash-and-grabs of items such as computer equipment before, but never thefts of works of art.


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Can New Technology Bring Authentic And Transparent Trust To The Art World? Like VIN Numbers For Art-Works. – Forbes

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In 1987, I was lucky enough to attend the auction of Vincent Van Gogh’s Vase With Fifteen Sunflowers at Christie’s in London. At the time, the sale price of $39.7 million was staggering.  Inflation- adjusted, that’s $127 million today. Two years later, in 1989, the Dallas Cowboys were sold for $140 million. In November 2017, Leonardo Da Vinci’s, Salvator Mundi, was sold for over $450 million. The prestige associated with rare assets (Forbes estimates that the Dallas Cowboys are now valued at over $5.7 billion) has a lot to do with the market value of uncommonly traded assets. Still, authenticating the origin and history of a sports team is easy.  But to do the same thing for expensive artworks has always been incredibly difficult.

The art market has seen extraordinary growth in its size and the value of its assets over the past 25 years and longer.  Living artists are now able to sell their artworks at significant values at market entry – what are called primary market sales – during their lifetime and to see significant rises in the value of their art including in the secondary market. This is a relatively new experience for the market.  History’s old masters and more modern artists never got to experience these trends during their lifetimes. Art market auction sales tipped $50 billion in 2021, and the unofficial private sector of the market is probably another $50 billion. Think about a $100 billion annual sales industry, that is based on trillions of dollars of assets, that all need to be authenticated, secured and monitored for many different purposes ranging from insurance to sales values and other market opportunities.

Our guest for today’s podcast is Lawrence Shindell, he is the Chairman, President and CEO of LMI Group International, Inc., headquartered in New York. LMI Group is a strategic investment bank-like firm that represents artwork owners and investors in the authentication underwriting and market release of major orphaned artworks – artworks that the data strongly indicate are by blue-chip artists and have expected market values between $15,000,000 and $200,000,000.   A trial lawyer by background, Mr. Shindell holds licenses in a number of U.S. jurisdictions including admission to the Bar of the Supreme Court of the United States.  Before founding LMI Group in early 2018, Mr. Shindell served as the Chief Executive Officer of a regulated U.S. title insurance company catering to the international art industry. 

His insights about the art market and its needs and trends over the next decade – ranging from technologies to solve the challenges of art object identification and authenticity to NFTs – provide a glimpse into a very complex industry sector. It is often said that the world’s art serves as the tree rings of society. Advances in technologies can bring efficiency to this market sector just as technology has brought efficiency to other markets, and can give us a sense of comfort about the integrity of these high value assets as we visit art museums, collect art, invest in art, or engage in and around art in many other ways. 

 Artwork, both old and new, and both digital and physical, make up a huge market that offers cultural engagement as well as incredible economic upsides for investors who invest in art. Improvements in four areas can change the level of comfort for investors.

  • Anti-money laundering – legislation that is increasingly offering transparency but also putting pressure on market actors to verify source of funds, and seller and purchaser legal status and identity, whether for purchasing or selling art or using art as collateral for loans, for example. 
  • The advent of the blockchain and more recently NFTs are revolutionizing the ways in which we link irrefutable identifying references to physical and digital art, as these assets journey through the market via purchases, gifts, sales, exhibitions and events of condition-conservation among other events, and in the case of NFTs, especially as a medium in which to create art in the first instance, as a means to create verifiable fractional and complete ownership interests.
  • Different technologies will separately allow us to imprint identifications on existing, secondary market physical works that can distinguish these objects from copies and also enable a conclusive linking of the information around the object captured via the blockchain to the exact physical object. 
  • Advances in artificial intelligence and machine learning science and technologies that can aide traditional measures to appraise and verify art in complement with these other technologies. 

The idea of reliable object identification is nothing new.  We use VIN numbers for automobiles and CUSIP numbers for the securities industry. And we use DNA markers to authenticate the origin and history of, for example, cloning material. 

Hollywood has been using tales of the historical art world for decades, the most known example is perhaps the 1999 version of The Thomas Crown Affair, starring Pierce Brosnan and Rene Russo in the lead roles. While interests and tastes in the art world have evolved from old masters to modernists to an expansive contemporary art market today, the art market as a whole shows no signs of slowing down. 

We can expect to see continued rapid growth including with the introduction of NFTs and factional ownership options. Each of the issues just highlighted are central to LMI Group and its specialization in authenticating to conclusive factual standards culturally and historically important works of art that have been lost to history but can reliably be reintroduced to the cultural sector, and in applying its expertise to cultural heritage initiatives that involve complex authentication of historical objects and information.  

             LMI Group is at the forefront of advances that are designed to enable objective, data-based analyses and decision-making in the art and cultural heritage sector.

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Artists Invited To Enter Artwork In Florida Strawberry Festival Fine Art Show – Osprey Observer

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Artists young and old, professional and amateur, are encouraged to enter original artwork into the 2022 Florida Strawberry Festival Fine Art Show. Your artwork is eligible to win a ribbon and cash prize.

A call to artists has been issued by the East Hillsborough Art Guild (EHAG) for the 2022 Florida Strawberry Festival Fine Art Show, which runs from Thursday, March 3 through Sunday, March 13 at the Festival Grounds in Plant City. The show will be held in the Milton E. Hull Building.

Adults are divided into professional groups (entry fee is $15) and amateur groups (entry fee is $12). Adults can enter oils, acrylics, watercolors, graphic/mixed media and sculptures. The entry fee for miniature art (2D media) and sculptures (3D art) is $12.

The youth divisions are by ages. Youth can enter oils, acrylics, watercolors, graphic/mixed media and sculptures. The entry fee is $5.

Adults can enter up to four entries, but no more than two in the same division. Youth can enter up to two entries.

Entries are eligible for substantial monetary awards. This includes $100 for the Strawberry Theme Award (an entry must include strawberries or reflect the current festival theme of ‘#1 for FUN!’). There is also $300 for Best of Show.

There are prizes for first ($150) and second ($100) place in all adult and youth divisions. Adult amateurs, miniature and sculpture entries receive $100 for first place and $75 for second. Adults who receive third and fourth place receive rosette ribbons.

For youth, first place receives $25 and second place receives $15. Entries who win third and fourth place receive a rosette ribbon. All youth participants receive participation ribbons.

Artists who do not win one of the above prizes are eligible for a Business Leaders Choice Award. Area residents can also become sponsors for the In Honor Award and select a winning artist who will receive a ribbon and $50.

Space is limited and entries are accepted on a first-come, first-serve basis. Early entries are accepted until Friday, February 11. Artists can mail their entry form and fee to East Hillsborough Art Guild, P.O. Box 3055, Plant City, FL 33564. Artwork must be brought to the Festival Grounds on Saturday, February 19 from 12 Noon-6 p.m.

Chairperson Karen Crumley said, “Our entry day was moved to Saturday to allow easier access to more working people or parents with school age children.”

Entry forms and rules can be found at www.flstrawberryfestival.com. If you have questions, please email Crumley at kscrumley@yahoo.com or call 924-3829.

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