Corporate art collecting in decline since the eighties – Wall Street Journal

CORPORATE COLLECTORS TREND

Corporations in distress sell art collections

Another bankrupt corporation, another corporate art collection on the block. Actually, no one quite knows what Lehman Brothers, the financial services firm that filed for bankruptcy protection on Sept. 15, will do with its 3,500-piece art collection, but with works by such bankable artists as Jasper Johns and Andreas Gurky, it is likely to be on sale at a major auction house near you.

Companies in trouble sell whatever can raise them money, and art collections are but one more asset. Arthur Andersen, the accounting firm brought down by the Enron scandal, for instance, turned two floors of its Chicago offices into a gallery showroom in 2002, selling more than 2,000 artworks over a five-day period. In 2006, the New York futures broker Refco Inc., which filed for bankruptcy protection the previous year while under investigation for hiding $430 million in debt, sold 321 photographs for $9.7 million at Christie’s auction house over a three-day period.

“The major sales of corporate art collections that I’ve been involved with have been distressed situations,” said Joshua Holdeman, senior vice president at Christie’s, who in 2003 had also helped both Enron and Seagram sell artworks from their collections when he worked at Phillips, de Pury & Luxembourg. At other times, corporate consignors of art at the auction houses are not identified out of fear that the sale “may be seen as a sign of distress,” he said. “In the grand scale, of course, no one’s art collection will get it out of trouble.”

Mergers and acquisitions, office moves are other causes

Corporations get rid of their art collections for other reasons than doom and gloom, of course. Mergers and acquisitions bring in new leadership that simply doesn’t want the old stuff around. Or yesterday’s art doesn’t work in today’s new building.

Take Unilever. In 1982, the company had bought a 92-work collection of black-and-white museum-quality photographs for its then-new headquarters on Chicago’s Wells Street. Assembled quickly by an art consultant, the collection included such renowned photographers as Diane Arbus, Henri Cartier-Bresson, Robert Frank, André Kertesz, Irving Penn and Alfred Stieglitz.

By 2003, however, the company was ready to move again to a somewhat smaller building on North Michigan Avenue, and so it was time for the art to go. “The old space was classical and elegant, with muted colors, and the black-and-white photographs worked,” said Jessica Jolly, facilities manager at Unilever. “The new building had a different design idea, and people wanted bright colors.” In fact, they didn’t want art at all but large-scale photographs of the company’s products splashed about on the walls. “We show images of Suave shampoo, Ragu bottles, tea packages — images employees can connect to.”

Deaccessioning by gift to public alternative to sale

To Unilever’s credit, the company held a public sale of the 92 photographs, raising $400,000 that was donated in full to the Marwen Foundation, which provides free art classes to Chicago’s disadvantaged youngsters in grades six through 12.

More recently, Altria, which had changed its name from Philip Morris Cos. in 2003, disposed of half of its 700-piece art collection when it relocated its headquarters to Richmond, Va., from New York City’s Park Avenue last March. “Our Richmond headquarters now features a lot of Virginia artists,” a spokesman said. The move ended the company’s 25-year-long relationship as a branch of the Whitney Museum of American Art, but its parting gift to the city was almost 200 works from its collection (featuring pieces by Jennifer Bartlett, Romare Bearden, Philip Guston, Betty Saar and Andy Warhol) to 10 institutions, including the Whitney, the Studio Museum of Harlem, the Brooklyn Museum of Art and El Museo del Barrio.

Heyday of corporate collecting over

Once proud buyers of A-list art, corporations are taking a second look at collections. Amid the corporate downfalls and takeovers, we are seeing signs that the heyday of corporate art collecting is over, replaced increasingly by budget-priced decoration.

Volatility a cause

“The 1980s was the high point in corporate art collecting, but the crash at the end of the ’80s started the process of killing it off,” said David Galenson, an economics professor at the University of Chicago and the author of the 2006 book “Old Masters and Young Geniuses: The Two Life Cycles of Artistic Creativity.” “Company executives found out that the art market could be a very volatile thing that they didn’t want to be part of.”

Astronomical prices another factor

Other factors contributed as well. The prices for top-flight art have risen to astronomical levels, draining corporate resources, and the type of art that is expected to appreciate in value “costs money to maintain, in terms of storage and climate control and state-of-the-art facilities in which to display it,” said Mary Lanier, former director of the Chase Manhattan Bank art collection and now a private corporate art adviser. Shareholders and board directors have less and less tolerance for major art expenditures, according to Princeton University economist Orley Ashenfelter, who noted that “firms, especially when the economy starts to sour, recognize their need to stick to their core business.” The result has been a 20-year-long disposal of one corporate art collection after another.

See

• original article also refers to JP Morgan in Wall Street Journal
• latest posts with references to corporate collectors, all collectors

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