RUSSIAN PAINTING AND THE BRITISH ARTMARKET

AFTER NEW YORK, LONDON IS THE WORLD’S SECOND LARGEST MARKET FOR PAINTINGS, WATER COLOURS AND DRAWINGS. ANNUALLY, LONDON’S GALLERIES, ART DEALERS AND ESPECIALLY ART AUCTIONS SELL ABOUT TWENTY-FIVE TO THIRTY PERCENT OF THE VALUE OF WORKS OF ART SOLD WORLDWIDE. TO PURCHASE ART AT SOTHEBY’S OR CHRISTIE’S IS CONSIDERED BOTH PRESTIGIOUS AND A GOOD INVESTMENT. RUSSIAN ART IS A SMALL, BUT INCREASINGLY SIGNIFICANT COMMODITY.

After the 1917 Revolution, the Soviet Union was closed to western influences. Nevertheless, through White emigres antique Russian art and Russian paintings continued to be sold on the international market. These masterpieces are now being appreciated by the new wave of emigrants from the former Soviet Union.

It was not until the detente of the late 1960s and early 1970s that the Soviet Union began to open to the West. Through publications, international conferences and exchanges, the West began to learn about historical and contemporary Soviet artists, particularly the avant-garde of the early twentieth century. In this regard, to facilitate the mounting interest the Soviet authorities were forced to allow exhibition of the private collections from metropolitan and regional centers, particularly the famous George Costakis Collection and lesser ones such as those of Abram Chudnovsky, Yakov Rubenstein and G. Ivakin. Through those collections many paintings, including those of Russian avant-garde, were made available to Soviet citizens as well as the West.

Unfortunately, the Soviet era used to be marked by corruption. Through the ambiguity of the customs' regulations and despite the Ministry of Culture red-tape procedures foreign diplomats and mass media correspondents found ways how to take works of art out of Russia. Icons and the decorative arts were primary, but many old masters and contemporary art were also to leave Russia to become either a decoration of overseas houses or a commodity.

In the mid-seventies western dealers and auction houses began to take a serious interest in Russian art. In 1974, on the initiative of Peregrino Paulin, their President at the time, Sotheby's held an exclusively Russian art auction in London, followed by another project: Tilo Van Watsdorf, later the Chief Expert for Hapsburg Feldpieces of Leo Bakst, Alexander Benois, Natalia Goncharova and other Russian artists of the early twentieth century received critical acclaim, and the auction was a smashing financial success.

Meanwhile, Christie's, the perpetual rival to Sotheby's, focused on decorative artwork, icons and jewelry. By 1984, following this tradition, they had come to an understanding how they would carve up the market at their annual Russian art auctions.

There is an old adage: "Sotheby's are auctioneers who pretend to be gentlemen while Christie's are gentlemen who pretend to be auctioneers". Thus, Christie's would only auction art with a legitimate provenance. Their 1988 and 1989 October shows were considered to be outstanding. In contrast, Sotheby's left themselves at risk by selling art of dubious legal and artistic documentation; however they relied on their Russian "experts" who they used to invite to conduct conferences and professional workshops to coincide with Sotheby's annual London auction.

With the introduction of perestroika under Gorbachev, the Soviet Union embraced both its pre-revolutionary traditions as well as contemporary western values.

In 1988 Sotheby's created a sensation by holding their first Moscow art auction, featuring Russian avant-garde art of the early twentieth century contrasted with avant-garde art of the Soviet 1960s to 1980s. The auction was followed by a renewed domestic and overseas interest in Russian art: large scale exhibitions of avant-garde art; new publications on Russian artists such as Pavel Filonov, Mikhail Matiushin, Liubov Popova, Olga Rozanova, Alexander Rodchenko and Alexander Drevin among others. Art galleries and museums undertook special exhibits, and the Soviet Culture Fund, in conjunction with Sotheby's, undertook two series of lectures in the United Kingdom on Russian art, as well as joint workshops with Soviet and British experts in Moscow on the exchange of art treasures and their marketing for sale. Perhaps the most spectacular exhibition was sponsored by the Soviet Culture Fund and De Beers, the diamond merchants. Entitled One Hundred Years of Russian Art the 1989 exhibition was shown in London, Oxford, Southampton and Moscow. It traced the history of Russian art from 1880 to 1980; many of the pieces were borrowed from private collections, previously unseen publicly.

Prices at Sotheby's and Christie's were astronomical. At Sotheby's 1989 auction, Liubov Popova's paintings exceeded 500,000 GBP a piece; Alexandra Ekster's Bridges of Paris, although not authenticated, was estimated at $800,000 US. The London prices set off a flurry of sales in France, Germany, Switzerland and Italy. European auctions included both works of art recently brought from Russia, often illegally, as well as Russian art long hoarded in private collections.

In 1989 there were fifteen galleries in London dealing in Russian art. It is estimated that Phillips, one of the largest, put to auction over fifty percent of the smuggled and unauthenticated Russian pieces. Prices, particularly for avant-garde art, were comparable to European masters. Works by Russian realist painters and those by the Mir Iskusstva followers were being sold for ten times their 1980 values. Despite forgeries, there was an enormous appetite for Russian art, and 1989 is considered the highest point.

The early 1990's saw the collapse of the international Russian art market. There were a variety of contributing factors, but forgeries, smuggling and changes in investment strategies were critical. At the April 1990 Russian auction by Sotheby's only two of the twenty-one avant-garde masterpieces from the George Costakis collection were sold, although part of the problem was the refusal of the owners to accept some bids. The Christie's Russian auction of 1990 was a disaster: the thirty-five canvases of the Russian avant-garde collection of Kurt Benedict, allegedly purchased from a 1922 exhibition at the Van Dimen Gallery in Berlin, were subsequently proven to be of dubious origin and the appraisal was suspect as well. By 1992 the market was so depressed that Christie's was forced to sell Repin's Painter's Daughter Tatiana with Her Family to a Japanese dealer for a mere $180,000 US; in 1989 it has been appraised at $1,000,000 US. Works by Philip Malyavin, Konstantin Korovin and Alexander Benois would not sell at any price. In an attempt to revive the market, in 1991 the Russian Culture Fund sponsored an exhibition, Twilight of the Tzars, it failed to arouse public interest and was considered a flop; the Daily Telegraph summed up the general opinion in the question: Was Russian Art Really So Bad?

The reaction among dealers and auction houses was swift: Phillips closed their Russian Department; Christie's suspended their annual Russian art auctions until 1995, Sotheby's refused Russian avant-garde art entirely; by 1992, following the financial disasters in the City, and fear of speculative investments, ten of the leading galleries closed, only Roy Mile's in Bruton Street, London, who had been the most fashionable and extravagant, survived, and he had to discount even Russian realist paintings by a thousand to fifteen hundred percent.

Despite the collapse of the 1989 bubble, Russian art still sold. Sotheby's continued their annual Russian art auctions, albeit with more stringent authentication. Although they renounced avant-garde art, they championed such Russian painters as Vasily Kandinsky, Alexei Yavlensky and Marc Chagall. Meanwhile, Christie's turned more to their traditional strength: Russian icons and decorative artwork. Their sales in New York and Geneva were modest but steady. Although their expert Alexis Tiesenhausen attempted to establish better connections with Russian museums and galleries, he failed; finally another expert, Alice Mich, left. In the period from 1991 to 1994 Sotheby's sold 1669 Russian paintings while Christie's managed only 328.

By 1994, a new trend is discernible: the cultivation of individual buyers, particularly the Russian nouveau riche. As early as 1992, the expert in East European art markets, Peter Batkin, was working with various Russian ministries and corporations, as well as Sotheby's, to facilitate international trade in antiquities. A consortium was proposed between Sotheby's, the Vozrozhdeniye (Renaissance) fund and a few big Russian banks. Sotheby's experts, John Stuart and Ivan Samarin, became familiar with the Russian sources of art, potential Russian buyers, and overseas buyers and sellers. At the same time, various obstacles to trade, whether exports or imports, through the Russian bureaucracy had to be understood, and, if possible, ameliorated.

Sotheby's December 1994 auction featured higher prices and the arrival of new Russian buyers, whether individuals or corporate representatives of banks, galleries and industries who, with their experts' advice, purchased up to thirty percent of the Russian art. They usually bid from $10,000 to $40,000, with few bids over $100,000. By 1999 the average price had doubled.

Although Russian avant garde art was discredited by 1990, Russian realism, including Mir Iskusstva and peredvizhniki, rose substantially between 1994 and 1999 - approximately seven fold - but both trends have always been at the top of the list all through the history of the Russian art market in Britain. The realist lots at the auctions hit their highest average price. Apart from the inexplicable cases like the one with Pyotr Vereshchagin's "Landscape of Nizhny Novrogod" sold at the ridiculous for such a canvas $225,000 US at Sotheby's auction in June 1995, the prices for Russian realists outdid three to five times the figures of 1990.

The situation with the Mir Iskusstva paintings and scenographic artwares deserves special mention. Beginning in the late 1960s, Sotheby's had traditionally featured such artists as Leo Bakst, and Konstantin Somov at their European art auctions up to the Russian art market crisis. In the mid 1970s there were exclusive Mir Iskusstva auctions. By 1990 the average prices were about $10,000 US. The crisis that followed cut down the average price by two and even the figures of 1995 failed to outdo it much, although the volume of sales for the Mir Iskusstva masters had grown five fold. Just to compare: the prices for Boris Grigoriev's and Kuzma Petrov-Vodkin's works shot by seven or eight times. Nevertheless, these prices were considerably lower than prices for French, German or Scandanavian paintings of a similar style and period.

At best, Russian paintings represent about one percent of the total volume and value of Sotheby's and Christie's sales. It is estimated that these two auction houses sell about seventy percent of the value of world art, or about 3,000 pieces daily. The market for Russian antiquities and art is thought comparatively new if compared to the markets of manuscripts, engravings, jewelry and old paintings. But the way it has been developing lately and certain tendencies of Russia's economic growth allow viewing its prospects as optimistic and bright. Strange as it may sound, a breakthrough in pushing the Russian art market in Britain has been assured by starting an antique market in Russia itself. Before 1998, and the massive devaluation of the ruble (including the notorious failures of Tveruniversalbank, Mosbiznesbank, Incombank and others), Russian corporations, galleries and state funds were very active in the art market, both domestic and overseas. They tended to buy Russian art and antiquities. Since 1998 individual Russian buyers have dominated the market. Overseas they represent forty percent of today's purchases. Domestically, they tend to purchase through galleries, which have doubled in number in the past two years.

Overseas Russian purchases tend not to be repatriated because of high income tax (thirty percent of cost) and customs duties (forty- five percent of market price). Furthermore, the "New Russians" investment tastes have changed: now they prefer European art of the Fifteenth to Eighteenth Centuries, as well as Art Nouveau, Deco and Impressionism. They are prepared to spend up to $4,000,000 for a second rate Impressionist painting. This may be seen as a return to the pre-1917 tradition of making great Russian collections.

Auction houses are well aware of new Russian investors. Sotheby's Russian Department hired Joanne Vickery to head a new, very ambitious, team of experts with the objective of matching the art to the taste of the individual purchaser. At Sotheby's 2001 Autumn auction, two paintings by Zinaida Serebryakova, "the Nudes", went for $270,000 US and $276,000 US (plus VAT), although a self portrait by Serebryakova, considered more important artistically, went for only $92,000 US. It turned out later that the auctioneers had been aware of a special interest some of the bidders had in purchasing those two pictures. At the same auction, a canvas by Vladimir Baranov-Rossine went for $326,000 US. The deal was so successful with the help of the art dealer who was representing the owner bidding as well.

Attracting rich Russian investors has become standard for both Christie's (especially their Swiss auctions) and Sotheby's. Potential buyers are usually "warmed up" with discreet hints about the impeccable provenance and artistic merits of select pieces. At Sotheby's May 2003 auction two attractive pieces from the Boris Shaliapin Collection, one by Mikhail Nesterov and the other by Boris Kustodiev, went to two Russian businessmen for 510,000 GBP and 846,000 GBP respectively.

were considered, even by experts, to be grossly over-priced. Old Masters, and Art Nouveau and Art Deco artware, have had a three fold rise in values. Some speculate that the rise in prices, similar to the spectacular heights of 1989-1990, is related to the recent accumulation of wealth in the world, especially America, Europe and Russia. For some, Art is seen as a good investment in times of uncertainty. Unfortunately, most investors lack an understanding of art, and are dependent on gallery owners and experts, whose taste cannot always be impeccable or impartial. All that makes Russia's art market difficult to control. A similar work of art can be bought two or three times cheaper elsewhere depending on the art dealer who is selling it. This kind of uncivilized relations are, of course, "growing pains"; history will find a balance, as it has many times in the past.