The Trends According to Auctions/ Avner Sofiov

13/01/2022

Auctions are a source for deep insights about the market and information on current trends. A look at Christie’s and Sotheby’s auctions held in May teaches us, for instance, that gemstones are becoming increasingly dominant. We can also learn about the added value of the designer and the upward trend towards high-end items.

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Auctions are a good place of learning for anyone who wants to keep an ear to the ground of the market and understand it fully. The value of the diamonds and gemstones on the open market is determined at the auctions, which also serve as an indicator of trends in market prices. In order to analyze the information gathered at auctions correctly, we need to know who bought, what they bought and the history of the items over the years, as some appear in auctions time again. The first question – who really understands the business or is an outsider – a professional’s offer must always reflect commercial logic. The second question – who bought – is critical because it tells us about the market trends, as discussed further below.

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Avner Sofiov

And finally, the history of the item. When the categories for an upcoming auction arrive and you prepare by studying the material, you can also review the catalogs of the last few years and see when the items now on offer were first shown by the auction house, what prices they fetched and whether their value has generally declined.

Here I discuss the trends indicated by an analysis of the auctions held by Christie’s and Sotheby’s in May.

A Good Name is a Good Thing

The May auctions were characterized by secondary sales. Sotheby’s sold jewelry by the well-known designer, Suzanne Belperron’s private jewelry collection.

The sale of Suzzane Belperron’s private jewelry collection tells is about the high added value of jewelry that bears a brand name and the signature of a renowned designer. In regular commerce, a piece of jewelry is priced according to a simple connection between the materials and the final price.

To the best of my knowledge, the first name to work magic on the price of the jewelry he created was Peter Carl Fabergé. a Russian jeweler and artist, who became famous in the late 19th and early 20th century mainly for the Fabergé eggs that he created for the Russian czar in the family workshop. We are all familiar with the names of Cartier, Tiffany and van Cleef and Arples. Fewer will recognize, for instance, the name JAR – a partnership of two designers, whose signature on jewelry brings the price sky high.

 

The same is true of the jewelry designed by the French Suzanne Belperron (1900-1983). Her pieces are so original that she never felt the need to sign them. “My style is my signature,” she would say, thus making life harder for the jewelry historians, who sometimes have difficulty of associating a piece of jewelry with a certain designer based solely on its style.

The Gatchina Palace Egg

The Christie’s secondary sale of the jewelry of Lily Safra (who attended the cocktail party, adding her special charm to the event) reflected the same trend. Lily Safra decided to dedicate the proceeds of the auction, entitled Jewel for Hope, to her projects on behalf of children around the world (including the children’s hospital at Tel Hashomer). The sale of Lily Safra’s collection taught us two important things. First – the investment in special and “important” jewelry proves profitable – the jewelry fetches very good prices and indicates that the investment was worthwhile. And second – the fact that jewelry belongs to a well-known figure can add quite a few percentage points to the price. If, in addition, the jewelry collection include a brand name, as was the case in this sale, which included JAR and Belperron pieces – the value will be even greater.

Going through the catalogue, I see that some of the pieces of jewelry, although very nice, would surely not have fetched the suggested price had they not borne the name of Belperron. This shows us that the name makes the price and those who invest today in design, building a line, and creating a brand and a reputation – ensure that their merchandise will be worth much more in a few years than the simple sum value of the metal and stones.

Despite the widespread popularity of her designs, the name Belperron had been largely forgotten until the auction by Sotheby’s, which in 1897 presented the jewelry of the Duchess of Windsor. The 16 Belperron pieces offered in the auction revived her memory and the price of the jewelry she designed.

Suzzane Balperron

At the auction held on May 14, 2012, jewelry from the personal estate of Suzanne Belperron was presented. 60 items were sold for three times the pre-sale expectation. The overall total sale was 3.45 million dollars, and the most outstanding item sold was a diamond ring, for 489,255 dollars.

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Gemstones

Another trend indicated at the recent auctions was the strong presence of gemstones. Christie’s and Sotheby’s offer items only if they identify them with the present market trends. Therefore, simply perusing the catalogues, even without attending the auction itself, teaches us that gemstones are the rising star of today’s market, even surpassing diamonds.

 

For example. A rare 32-carat Burmese ruby, not burnt but also not transparent or clear, was offered in the Christie’s auction. The diamond, known as Sancy, bears a genealogical chart going back to 1859, the days of William ∏, emperor of Prussia. The diamond, weighing 34 carats, was sold for 9.5 million dollars – not much different from the price fetched for the ruby, which has no known historic connections except for its last owner.

 

The “important” gemstones are sold for high prices due to their rarity, and they are sometimes several times rarer than the diamonds. Thus, for instance, in the Christie’s sale, a pair of emeralds weighing 8.18 and 9.4 carats was sold for the very impressive price of 40 thousand dollars per carat. The price indicates that the buyer was a dealer, as the end consumer will pay at least twice that much for them in the jewelry store. A 30-carat Kashmir sapphire was not sold because it is very unclear. Nevertheless it is notable that its initial estimated value was 100 thousand dollars per carat.

 

Naturally, I am referring to the prices of the stones alone. In this price range for stones, the influence of the piece of jewelry on the overall price is minor compared with that of the stone. Only a piece from a brand name designer is likely to raise the return for a very important stone by an additional ten or twenty percent.

To the Extreme

The final trend I will discuss here is the split of the market into two extreme ends – very expensive and very inexpensive. The entire middle range is stuck. So if we want to stay in the game, we have to move away from the mainstream, into the special world of exceptional stones, exceptional colors and exceptional jewelry. We must bring as much commercial activity to Israel as possible, because if we don’t, we won’t remain on the map. To survive, we need to be a trade center that is very rich in goods and one that offers special items.

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