In tough times, art gets the brush off
Some companies sell collections to pay creditors
LONDON — Corporations worried about the bottom line are taking a look at their office walls.
Over decades, many of the world’s wealthiest banks and companies have built up art collections that are the envy of many museums. Now, some are selling off works that adorn offices and boardrooms — some from choice, but others to pay off hungry creditors.
The latter category includes collapsed bank Lehman Brothers, whose multimillion-dollar collection of works by Damien Hirst, Gerhard Richter, and others will be auctioned next month.
“Over the last five or six years we’ve dealt with more and more corporate as well as private clients,’’ said Saul Ingram, head of European corporate art services at Sotheby’s auction house.
Cathy Elkies, head of private and corporate collections at Christie’s, also says she has seen an increase in the corporate side of the business.
“In some cases, organizations are editing and refocusing their collections,’’ she said. “Others are looking to completely divest themselves of their art offerings.’’
Corporations collect art for a variety of reasons, of which turning a profit is often the least important. Some companies see supporting emerging artists as a form of corporate social responsibility, or philanthropy — works can be lent to museums and galleries for shows.
Others use art to flaunt their corporate wealth. Fred Goodwin, former chief executive of Royal Bank of Scotland, used to boast about the David Hockney in his office.
Sometimes, art is used to enliven the work environment.
Around the world, companies are sitting on artistic riches that the public seldom sees. The JP Morgan Chase Art Collection, founded by David Rockefeller in 1959, has 30,000 pieces, including works by Jean-Michel Basquiat and Andy Warhol.
In Britain, the banks RBS, HSBC, and Barclays all have large caches of art — unlike BP PLC, which despite drawing protests from environmentalists accusing it of using art sponsorships to whitewash its oil-stained image, doesn’t have a large corporate collection of its own.
When companies go under, it can trigger an art market bonanza. In December, bankruptcy administrators of Italian airline Alitalia sold a collection of Futurist artworks for $1.5 million.
In June, Sotheby’s sold 1,000 photographs by Ansel Adams, Dorothea Lange, and other photographers as part of a bankruptcy sale of Polaroid’s collection.
The tradition of corporations buying art in good times — and selling it in bad — stretches back decades. One pioneer was IBM president Thomas Watson Sr., who amassed works by Frida Kahlo and other artists to decorate the IBM pavilion at the 1939 World Art Fair in New York. In the 1990s, a cash-strapped IBM sold its collection through Sotheby’s for $31 million.
Other sales have been even bigger. In 1998, the Reader’s Digest corporate collection sold for $93 million.
Next month’s Lehman Brothers auctions at Sotheby’s in New York and Christie’s in London are expected to raise $12 million for the bank’s creditors — a significant sum, though only a tiny fraction of the $613 billion in debts held by Lehman when it collapsed in September 2008.