Paris is rising as an art market hub, with some way left to go

[PARIS] “This is the Mona Lisa of handbags,” said Aurelie Vassy, Sotheby’s head of handbag and fashion sales in Europe, as she unlocked a glass display case and proudly revealed a battered black leather Birkin.

“The first in the world, made for Jane Birkin. It’s the beginning,” said Vassy, pointing out the design features of the bag, specially made by Hermes for the Anglo-French singer and actress in 1984. Three years earlier, Birkin had found herself sitting next to the CEO of the luxury brand on a flight from Paris to London and had sketched the design on the back of a sick bag.

This precious fashion icon, on loan from the collection of the pre-owned luxury dealer Catherine B, was one of the star exhibits at the opening of Sotheby’s new salesroom in the Avenue Matignon district of Paris on Oct 12. The auction house held surrealism and modern art sales on Friday (Oct 18), just days after the inaugural edition of the Art Basel Paris fair began in the newly renovated Grand Palais.

The Paris art scene is expanding. After Britain’s 2016 vote to leave the European Union, a procession of international gallerists established spaces in the French capital, expecting its underperforming art market to revive at London’s expense.

When Art Basel took over the management of Paris’ flagship October fair in 2022, this nurtured hope that the city’s art scene would become a magnet for international collectors. (It ran the fair for a couple of years from a temporary location under the ungainly name “Paris+ par Art Basel” before rebranding for this year’s edition.)

But sales data suggests that Paris has some way to go if it is to eclipse London as an art market powerhouse.

“The cultural scene in Paris is one of the best in the world. It deserves to have a bigger share of the art market,” Mario Tavella, the president of Sotheby’s France, said in an interview. According to the 2024 Art Basel & UBS Art Market report, France’s estimated share of last year’s global art sales was 7 per cent, compared with 17 per cent for Britain. “The biggest wealth is still sitting in London,” Tavella said.

He added that Sotheby’s new Paris headquarters, on the corner of the Rue du Faubourg Saint-Honore and the Avenue Matignon, had “30 per cent more floor space, and ground-floor windows so people can see what we do inside”. The updated five-floor, 35,000 square-foot art deco corner building is near several on-trend contemporary art dealerships, such as Mennour, Mariane Ibrahim and Galleria Continua, as well as Christie’s and the city’s most exclusive fashion stores.

“We are very much in the hub of art dealers and luxury,” said Tavella, who declined to comment on the redevelopment’s cost. The move is part of Sotheby’s global strategy to occupy prestige buildings in the heart of cities with high concentrations of disposable wealth. In July, it opened “Maison”, a 24,000-square-foot space in Hong Kong’s Landmark Chater House. Next year, the auction house will move its New York headquarters into the Breuer Building on Madison Avenue.

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These initiatives are going ahead despite some turmoil in Sotheby’s finances. The auction house was acquired by French-Israeli telecoms entrepreneur Patrick Drahi in 2019 for US$3.7 billion. Since then, Drahi’s ailing Altice telecoms group has accumulated a debt mountain of about US$60 billion. The Wall Street Journal reported in September that Sotheby’s itself is burdened with US$1.8 billion of debt, bonuses for senior staff members have been converted into IOUs and executives are concerned the auction house might not be able to pay its wage bill on time.

The announcement in August that the Abu Dhabi sovereign-wealth fund ADQ would be investing US$1 billion (including an undisclosed contribution from Drahi) in Sotheby’s and acquiring a minority stake seemed to offer some respite. But the company’s auctions made a US$115 million loss in the first half of this year and financial risk assessors Moody’s has downgraded Sotheby’s credit rating.

Increasingly, with the art market in a slump, Sotheby’s sees luxury as a path to growth. Last year, luxury contributed a record 31 per cent of Sotheby’s US$7.9 billion annual sales, according to Mitzi Mina, a company spokesperson. The new Paris headquarters will hold sales of watches, jewelry, handbags and fashion. Clients will be able to sample wines for sale in Sotheby’s only dedicated tasting cellar.

“The luxury market is booming, and we are part of it,” Vassy said of the handbags and fashion department. “We are French,” Vassy added. “It’s an asset.”

But what about the art that still generates more than 70 per cent of the turnover at Sotheby’s in Paris? Has a new salesroom transformed the quality, range and value of the works at auction?

On Thursday (Oct 17), Sotheby’s presented a relatively modest 28-lot surrealism sale, including a 1947 Rene Magritte gouache, estimated at three million to five million euros (S$4.3 million to S$7.1 million). A 40-lot offering of modern art sale includes early works by Jean Dubuffet valued between at 3.5 million euros and seven million euros – but not much else priced over one million euros. Last week in London, at Wednesday’s “Frieze Week” auctions of modern and contemporary art, a David Hockney landscape sold for US$17.2 million at Sotheby’s and Lucian Freud portrait for US$15.4 million at Christie’s.

“In terms of sales revenue, France remains well behind its neighbour across the Channel. Paris does not have the same place as London in the very high-end market,” said Thierry Ehrmann, the founder and president of the France-based auction analysts, Artprice.

The opening of Sotheby’s new French headquarters is part of a more general renaissance in the Paris art scene. Increasing numbers of international visitors, some of them very wealthy, want to visit fairs, galleries, museums and auction houses in this intoxicatingly stylish city. But visiting is one thing; buying, another. And Sotheby’s is a company under serious pressure to translate style into financial substance.