From Phillips to Phillips de Pury & Co.

Phillips de Pury & Co.’s inclination towards contemporary art, photography and design perfectly demonstrates the mutations of the art market during the last decade.The auction house experienced the exhilaration of the surge in prices and the violent contraction of the market… no matter what, Phillips de Pury & Co will stick with ultra contemporary art.

Phillips was founded in 1796 by Harry Phillips, a former clerk of James Christie, founder of Christie’s Auction House. Since its acquisition in 1999 by Bernard Arnault, the French business tycoon at the head of the luxury goods group Louis Vuitton Moët Hennessy (LVMH), the focus of Phillips de Pury & Co’s sales has been increasingly steered towards the contemporary art market. In 2001, contemporary art only represented 4% of the lots it sold versus 32% for 19th century art and 44% for modern art. By the end of the following year, Phillips had substantially altered the structure of its sales by selling nearly as many contemporary works (29%) as modern works (30%). This development coincided with the auctioneer seeking to project a more up-to-date and less rigid image than its competitors Christie’s and Sotheby’s. However, the shift also had a downside: the number of catalogued lots fell sharply in 2002, leading to a 61.7% contraction in revenue compared with 2001. The company did not get back to annual revenue above $200m until 2007.

In 2002, the luxury group LVMH sold its shares in the company Phillips to Simon de Pury and Daniella Luxembourg, who continued to focus the company on the most recent segment of the art market. In 2004, Contemporary art works represented 60.9% of the lots sold and the “contemporary” identity of Phillips, de Pury & Luxembourg seemed firmly established! The subsequent explosion of demand and its concomitant price inflation (2005-2007) boosted the auctioneer’s revenue by 137.6% in 2007 to a total of $241.8m generated from just over 3,000 lots.
On 6 October 2008, the Russian group Mercury acquired 50% of the company. The opening of the company’s capital to this luxury goods import specialist was designed to accelerate the company’s progress in emerging markets and give the auctioneer a better competitive footing vis-à-vis Christie’s and Sotheby’s. At the same time, Mercury decided to minimise the auctioneer’s risk exposure by substantially curtailing its sale guarantees. However, the crisis has led to budget restrictions and the closure of Phillips de Pury & Co.’s Cologne branch in April 2009, at Mercury’s request.
In effect, having positioned itself on the most volatile segment of the market (contemporary art), Phillips de Pury & Co. has suffered the full brunt of the subsequent price deflation and contagious buyer reticence: its New York Contemporary Art Sales on 14 and 15 May 2009 were a fiasco only generating $10m versus a total of $62.8m from its Contemporary Art Sales a year earlier (15 and 16 May 2008).
The drop was brutal… but the auctioneer has decided to hold its course on the ultra-contemporary market by restructuring its sales with a new series of themed sales, mixing contemporary art, photography and design, domains generally catalogued separately.

The first test of this new formula will take place in London on 26 September with a sale entitled Now: Art of the 21st century This sale of 291 mixed lots (photographs, contemporary works and furniture) created since 2000, with a number of completely unknown names (estimated at a couple of hundred pounds) rubbing shoulders with the mega-stars of the market like Damien HIRST and FANG Lijun… Tom PRICE’s Meltdown chair (estimated £4,000 – £6,000) will be auctioned along side Candida HÖFER’s photograph The Metropolitan Museum of Art New York II (estimated £15,000 – £20,000). Two lithographs of Damien Hirst’s famous diamond-encrusted skull (For the Love of God, Laugh; The Diamond Skull, £10,000 – £15,000) will be offered alongside a cheap imitation of the Hirst skull by entitled For the Laugh of God (estimated £6,000 – £8,000).