Artist Damien Hirst's audacious sales strategy

Art sales: bullish Hirst rattles the market
Last Updated: 12:01am BST 24/06/2008

Colin Gleadell on Damien Hirst's direct sales plan

Market news
Damien Hirst has unveiled an audacious plan to bypass his dealers and sell directly at auction, sparking fears that the salerooms will take business away from galleries selling new art.

No surprises: Hirst has always been his own man
In September, he will offer a number of new works directly from his studio at Sotheby's. Leading the sale will be a 2m x 3m bull in formaldehyde called The Golden Calf, with hooves and horns cast in solid 18-carat gold, and a golden halo crowning its head. The sculpture is estimated to fetch up to £12 million, which would be an auction record for the artist.

Hirst has always been his own man. Twenty years ago, he bypassed the gallery system with the landmark exhibition, Freeze. Since 1991, he has been represented by Jay Jopling, the founder of the White Cube gallery in London, and, since 1996, by the Gagosian Gallery in America, two of the most powerful contemporary art galleries in the world.

However, as he has become more successful, he has chosen to work with several other galleries, notably Mexico's Galguera. His contracts with White Cube and Gagosian are not exclusively binding, so he can show and sell where he wants.

For most artists, the gallery system is invaluable in the way that it nurtures their careers, and they are happy for dealers to take an average 50 per cent commission on sales. But Hirst is so powerful that he can dictate rates of as little as 20 per cent. Even then, the earnings for his galleries can be considerable. At Hirst's show at White Cube last year, about £130 million in art was sold.

But, at the Sotheby's sale, neither Gagosian nor Jopling will get a penny. Both are putting on a brave face: Gagosian says that "as Damien's long-term dealer" it will be prepared to bid, while Jopling says he is "looking forward to many adventures to come" with Hirst.

Others in the art world, however, see a parallel here with the way film stars asserted their independence from controlling Hollywood studios in the late Forties and believe that where Hirst leads, others will follow.

Hirst says he wants to continue working with his galleries, and no doubt he will. But, after the success of the "Pharmacy" sale at Sotheby's in 2004, in which he sold the contents of the former Pharmacy restaurant in west London for £11 million, he discovered a taste for the auction process, with its high-powered marketing and global reach. He now thinks auctions are "a democratic way to sell art and a natural evolution for contemporary art".

While Christie's is known to have designs on the so-called primary market, Sotheby's is not. Oliver Barker of Sotheby's says that the Hirst sale is just "a reflection of our relationship with Hirst and not part of any corporate strategy to enter the retail business". So far, that relationship has produced two highly successful auctions: the Pharmacy sale and the "Red" charity sale held earlier this year. But can the partnership work again? Or will it become a victim of the current gloomy economic situation?

Prices for Hirst peaked at auction last summer when the large pill cabinet, Lullaby Spring, sold to Sheikh Saud Al-Thani for £9.6 million. But, since then, more than a dozen significant works by Hirst have gone unsold. According to a survey to be published this week by ArtTactic, an art advisory company founded by former JP Morgan banker Anders Pettersson, confidence in Hirst's market has fallen by 25 per cent since last May. Since the record price was achieved last June, the majority of works that have been sold did so at the lower estimate.

The next indicator will be the London contemporary art sales which start on Sunday, where 21 works by Hirst will be offered with a combined estimate of between £9 million and £13 million. Potential buyers will be asking whether the market can absorb the quantity of Hirsts about to be unleashed in September. Such fears could dampen demand. And, while failure in a private gallery would not attract attention, in a public auction it could be extremely damaging.

All this makes The Golden Calf, the symbol of idolatrous worship of money, even more potent. It could herald a new peak in the excesses of the art market, or alternatively its complete meltdown.