What Recession?

13 08 2010

RAPAPORT… Headlines worldwide may be lamenting a global recession, but inside the sales room at Christie’s New York on October 21, buyers were not giving a thought to the world’s financial woes as they eagerly bought up the rare and the beautiful as if price were no object. Sold 85 percent by lot and 94 percent by value, the 385-lot sale totaled $46,513,050. A high note even in the best of times, during these days of economic uncertainty, that number seems almost miraculous, especially since the presale estimate was $25 million to $30 million. The final tally is much higher than the April 2009 sale, which garnered $19,293,675 for 174 lots sold of 208 offered, and the October 2008 auction, which totaled $29,423,450 for 183 lots sold of 264 offered. This sale was, in fact, close to the market’s peak in April 2008, which brought in $49,884,875.

Having It All
Boosting the bottom line was the sale of the Annenberg Diamond, which sold for $7,698,500, or $240,503 per carat, a record for a colorless diamond. The price shattered the previous per-carat record price for a colorless diamond, which was $208,000. That sum was paid for a 16-carat diamond at Christie’s Hong Kong sale in May of 2008. The Annenberg Diamond, however, had everything a buyer could possibly want. The 32.01-carat D flawless, type IIa square emerald cut mounted by David Webb, Beverly Hills, with two pear-shaped side stones — one weighing 1.61 carats and the other 1.51 carats — was exceptionally well cut. It had that special brilliance that distinguishes type IIa diamonds from the pack. Add to that a distinguished provenance and the stone, estimated at $3 million to $5 million, was a must-have for a few elite buyers who tried to walk off with it. After much bidding, the diamond finally went to an anonymous buyer.

With the geographic advantage of being right next to the jewelry district, the sales room was filled with dealers who drifted in and out through the day to see how the auction was shaping up. Many dealers in the room were raising their paddles, but those expecting to walk away with a bargain were disappointed as diamonds and jewelry alike went for top dollar. Bidding was so competitive that even though the auction started at 10:00 a.m., it was 7:00 p.m. when it ended, with barely an hour break between the morning and afternoon sessions.

Besides the Annenberg Diamond, four other lots topped the $1 million mark. An Asian private scooped up a 16.33-carat E internally flawless round diamond for $1,583,300, or $97,000 per carat. A pair of ear pendants with a 7.18-carat, pear-shaped fancy blue and an 8.04-carat, pear-shaped fancy light pink sold to an Asian private for $1,426,500. Also finding its way to an Asian private was a pair of earrings showcasing D internally flawless pear-shaped diamonds weighing 7.51 and 8.18 carats, which sold for $1,202,500. The final lot that soared over the coveted million mark was a Belle Epoque Cartier diamond and rock crystal bow brooch, which sold for $1,082,500, far exceeding its $200,000 to $300,000 estimate.

“With a packed salesroom and bids coming from China, all over Europe and, naturally, the U.S., it was as if the recession had never happened,” says Rahul Kadakia, head of jewelry, Christie’s New York. “Virtually every lot in the auction exceeded its estimate and the $7.7 million Annenberg Diamond astonished even the most seasoned professionals.”

In the Afternoon
While the morning session featured big stones and a selection of very wearable jewelry, the afternoon session shifted gears completely. The second sale of the day was geared more to collectible signed jewelry from the Art Nouveau period, objets d’art and studio artists, including Daniel Brush and Alexander Calder.

A number of Art Nouveau pieces were from Ralph Esmerian, the dealer and collector who has a fine eye for jewelry and whose collection boasts museum-caliber pieces. He was forced to sell some of his treasures to repay debt incurred in his purchase of retailer Fred Leighton, a financial debacle that has been well documented. These pieces, which could never be produced again, were picked up by buyers with a discerning eye.

Throughout the day, prices were strong, even described as “crazy” by some dealers in the room. However, it is not always the materials that make a piece of jewelry valuable. It is instead the designer’s prominence and the fact that a verylimited number of items were made. Such was the case with a brass necklace made by the artist Alexander Calder, whose work is displayed in a few notable museums. While Calder made some jewelry during his lifetime, it was not his primary artistic expression. However, he has a big name in the art world, as a sculptor and creator of mobiles, which pumped the prices on his pieces to astonishing levels — the brass necklace sold for $254,500 against an estimate of $60,000 to $80,000.

While it is notable that many in the industry believe that consumers are buying diamonds as a store of wealth, that is not always the case. One private collector at the sale with a financial background was buying simply for the beauty of the piece. He pointed out that when one compares diamond prices to the stock market or real estate over the long term, diamonds are not an item that has much return on investment.

“This was a well-rounded sale,” concludes Kadakia.“People want great jewelry, great objects and great stones. That is what we had. It was right for the times that we are in now.”

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