With Nobody To Impress Companies Are Quietly Selling Their Art Collections

Included in Christie’s auction of Swiss art last week (7-29 September) were two works being sold by Unicredit, an Italian bank. Lot 10, A Jean Tinguely sculpture, fetched CHF 75,000 ($82,552) which, the bank says, will help fund its Social Impact Banking initiatives. 

Few took notice of the niche auction, which was held online. The majority of works were sold by private collectors. But little by little businesses, and especially banks, are silently selling corporate art collections built up over many years.

Deutsche Bank, which holds one of the world’s largest corporate art collections, is reducing it by 4,000 pieces, says Friedhelm Hütte, head of Arts Deutsche Bank. “The number of branches is becoming less and less,” he says. “That has had an impact on the collection. The idea of our collection has always been art at the workplace.”

The German bank has closed over 500 branches as banking goes digital, and has just rolled out a new “hybrid model” allowing employees to spend more time working from home.

Fewer offices and bank branches equals less wall-space for artworks.

Or, in the case of British Airways, it is not wall space that is lacking but customers. In July, the airline sold an art collection that was gathering dust in empty first-class lounges for a sorely needed £2.2 million ($2.9 million).

Thomas Cook, a travel company, also needed the funds and recently parted with a 3,000-year-old Egyptian statue for £150,000 ($195,251).

Many companies are asking similar questions: Team meetings, client meeting and even board meetings are now being conducted online. Even magic-circle law firms, renowned for keeping workers at their desks for long hours, are adopting new work-from-home schedules.

Some banks, such as Deutsche Bank, were clearing out offices even before Covid-19 came along. Others, including Schroders which is expecting to close the sale of its headquarters, have introduced new home working plans.

In London, where most of these firms are based, the amount of office space available for sublet has surged 21% since June according to CoStar, a commercial real estate data company. Less than half of the U.K.’s workforce had returned to their desks before Boris Johnson said in September he was “once again asking office workers to work from home if they can.”

What all of this means for art collections is still unknown but it does not look good. None of the major auction houses have had a major corporate art sale since British Airways, though several in the industry say they have been conducting valuations.

Why Selling Art Is A Bad Look

But selling art is not a good look for companies. Few images capture a bank eating humble pie better than the Lehman Brothers sign being carried into Christie’s auction house.

Then there was Abraaj, the private equity group that amassed $1 billion in bad debt but still kept a £4.7 million ($6.2 million) art collection, sold by Bonhams in 2018. Companies are wary about what image this presents.

Instead many are choosing to unlock value in their art collections by lending against them, says Harco van den Oever, founder and CEO of Overstone, which helps firms and individuals do just that.

“What we saw was that in early to mid-March there was an explosion in inquiries coming from potential borrowers,” says van den Oever. Even then, though, only “the most extreme cases” were selling artworks, he adds.

Patrick McCrae, founder of ARTIQ, agrees that few are selling: “There have been one or two but these are clients that have come into more difficulty.”

McCrae says he has helped some clients sell their collections, but mostly his business of loaning artworks to offices has been healthy. “People are definitely not going into the office at the moment but I wouldn’t say that we’re seeing a massive drop off in clients leasing collections.”

Wokeism Sees Out Old Masters

If art is to stay on the walls of offices and airport lounges (and some is) don’t expect to see old masters. Unicredit says it wants to “replace the masterpieces sold with works of young and emerging artists.”

Deutsche Bank is set to increase “the contemporary quality” of its collection. “So we’ll have less prints and graphics and more original drawings,” says Hütte. Last year the bank sold Gerhard Richter’s Faust painting that hung in its old Wall Street lobby.

“It’s part of our marketing. It’s part of our relations with clients, so we use it a lot for client relationships and to talk to clients,” says Hütte.

Increasingly image and brand aware, companies want art that gives the impression of inclusiveness and cutting-edginess, whether or not that is the reality.

“It’s to make a place look good,” says McCrae, who has lent a series of works to Hiscox, the insurer, called Queer Frontiers. “It was an opportunity for them to highlight their inclusion.”

Similarly, Mayer Brown, the law firm, has a collection of female artists to show “passion and commitment to promoting diversity in the sector,” and UBS, the Swiss bank, commissioned Annie Leibovitz to create WOMEN: New Portraits.

The domino effect of this plays out across the art world. Many companies support young artists through such displays. Banks, including Deutsche Bank, UBS and Unicredit, fund prises for emerging talent and, despite everything, are still buying their art.

Artists therefore need workers to return to their offices so they can return to their studios. And the sooner the better.