Demand for Damien Hirst’s artwork may be weak and could be seen to worsen further in 2009

December 24th, 2008

DAMIEN HIRST – Beautiful Artemis Thor Neptune Odin Delusional Sapphic Inspirational Hypnosis Painting, 2007 – LOT 17 at Phillips de Pury Nov. 13th auction – UNSOLD – ESTIMATE $3,000,000-4,000,00

Demand for Damien Hirst’s artwork is reportedly drying up a bit after the artist sold almost $200 million worth of art on September 15th (as covered by ArtObserved here,) the same day that Lehman Brothers collapsed and the Dow posted its then-largest single day decline. Christopher van de Weghe, a New York art dealer, recently sold only 2 of 8 lots at this year’s Art Basel Miami Beach–with those two lots selling for several thousand dollars, much less than the recent low estimates  of their respective price ranges at auctions.  Even sales of certain Hirst art works with larger more recognizable runs, such as the medicine cabinets and spin paintings, are very slow–so slow in fact that Hirst’s production company, Science Ltd, is laying off up to 20 people (as covered by ArtObserved here.)

Additionally, several art markets experts expect prices for Hirst’s work to remain depressed through most of 2009 due to the significant output of supply that has come online in the last few years. “We will see less of him at auction or we’ll see as many works but with lower estimates,” said Anders Petterson, chief of ArtTactic market research firm, via Bloomberg. Petterson added, on the topic of a survey his firm conducted with 150 art industry respondents regarding Hirst’s works: “the feeling is that the Hirst market has been stretched a bit too far, almost as if it snapped and backfired.” This sentiment is echoed by other dealers and analysts in the same article. “There’s little or no activity at $1 million or higher,” said Chelsea dealer Perry Rubenstein, who has sold various Hirst artworks in the past. “The price level for his market is completely unclear right now,” said David Zwirner, the owner of one of the two largest galleries in Chelsea. However, both of these points could be applied to the broader art market, as there is very little visibility as to when and how the market could eventually recover.

Damien Hirst. Image via Portfolio.

The consensus now seems to be that “Beautiful Inside My Head Forever,” Hirst’s $200 million show earlier this year, which to some has come to signify much of the effervescence of the better part of the past decade, was most likely the peak of the market not just for Hirst but perhaps for the art market in general.   The success of that sale was notable and controversial not only in its extraordinary payout to the artist but also because the artist took his product directly to market using Sotheby’s, thus circumventing the dealers (primarily Larry Gagosian in New York and Jay Jopling in London).  Much of the success of that show has been attributed to the fact that Sotheby’s linked the work up with new pools of buyers hitherto untapped by Hirst’s dealer network, even taking the artworks on a roadshow to such places as India and the Hamptons vacation market in New York (covered by ArtObserved here).

Despite the historical success of the Sotheby’s sale, the type of art production and sales system that Hirst embodies could be particularly vulnerable in a down market.  Hirst’s work is systematic, ubiquitous, highly marketed through crossovers into fashion and music and backed by a highly extroverted large sized personality.  His works stand in contrast to, for instance, a less frequently produced Peter Doig painting, or for a more recently in the news example, a John Currin work, which, due to its rarity as a singularly produced oil painting, actually outperformed estimates in the recently depressed November New York auctions (his Nice ‘n Easy, 1999, oil on canvas work sold for $5,458,500, above it’s estimate of $3,500,000 to $4,500,000, as covered by Art Observed here.)    Hirst’s artwork can seem to be a sort of luxury product, a metal and formaldehyde accessory.  A Hirst work is in many ways a sort of status symbol that is more easily accepted by non-insider art buyers than another valuable but more esoteric work.  Many of Hirst’s works are  immediately striking or controversial, such as diamond encrusted skulls and massive, bisected animals in glass cases and they are thus very readily absorbed by all facets of media and correspondingly, by popular culture.   Many of the works are produced in large consistent series that are not only recognizable but marketed in such a way that new buyers might acquire them comfortably due to their mass cultural acceptance.

However, as the world economy has slowed the deep pools of potential buyers has dried up, leaving the buying activity largely in the hands of serious, experienced, sophisticated buyers who act with precision to acquire significant, quality works not recently nor perpetually produced by an art factory system.   The same mechanism that propelled Hirst to Icarian heights may thus cut him off at the knees.  In a burgeoning economy, relentless art production and marketing can grow an artist’s prominence, yet in a retreating market the high elasticity of art prices reacts quickly and negatively to the disproportionate supply.  Nevertheless, Hirst is a phenomenon not only in the works he produces but certainly in the way in which he operates within the art market, constantly pushing at the edges of the system.  He should in all likelihood continue to be unpredictable, dynamic and innovative in the upcoming years and should as such not be written off.

For the Love of God (2007) by Damien Hirst, via Wikimedia

Hirst Sale, Lehman Bust Mark End of Frothy Era: Martin Gayford [Bloomberg]
Damien Hirst, of $100 Million Diamond Skull, Sees Prices Slump [Bloomberg]
Has Hirst’s Bubble Burst? [Portfolio]
Hirst Market in Decline, Say Researchers [ArtInfo]
The Retreat [ArtMarket Monitor]
Damien Hirst’s primary-market Sotheby’s auction sets records alongside historic financial market collapse [ArtObserved]