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Weak Dollar Lures Art Shoppers on a Euro High

The U.S. dollar’s two-year decline in value against the euro has provided European art collectors with an array of apparent bargains at American auctions and fairs. The most recent set of opportunities was seized upon at last December’s Art Basel Miami Beach (see ANL, 12/21/04), according to dealers who have reaped the benefits of increased

NEW YORK—The U.S. dollar’s two-year decline in value against the euro has provided European art collectors with an array of apparent bargains at American auctions and fairs. The most recent set of opportunities was seized upon at last December’s Art Basel Miami Beach (see ANL, 12/21/04), according to dealers who have reaped the benefits of increased European buying power.

A number of American art dealers participating in the annual four-day event report that a far larger percentage of European visitors attended the show than in previous years—in large part a consequence of the euro’s rise from only 87 cents (U.S.) in 2002 to $1.32 by year’s end. As one dealer noted, European collectors could “pay for their trip to Miami with the savings” achieved by the favorable exchange rate they are experiencing.

“Europeans are very happy to be buying, and to be getting so much more for their euros,” New York City gallery owner John Cheim told ARTnewsletter, adding that overall sales to European collectors had risen from 20 percent of the gallery’s revenues in 2001 to almost 40 percent currently. Other dealers also report they have been cultivating a European clientele, whose increased purchases have offset price hikes for the works of European artists.

Says Manhattan art dealer James Goodman: “My sales to Europeans have grown vastly.” And Miles McEnery, director of New York’s Ameringer & Yohe gallery, states, “We are forging relationships with European collectors at an unprecedented pace.” Among the gallery’s artists most sought-after by these collectors, McEnery points out, are Americans, who have a well-defined place in 20th-century American art but “perhaps are not as well-known in Europe.” Among them: Helen Frankenthaler, Nancy Graves, Hans Hofmann, Morris Louis, Joan Mitchell, Robert Motherwell and Kenneth Noland.

However, American dealers—as well as buyers—are feeling the pressure of the weak dollar versus the euro in other ways. Cheim says it used to cost approximately $100,000 to participate as a vendor at Art Basel in Switzerland, “but now it costs 30 percent more.” Goodman, who specializes in 20th-century European modernism, declares, “I don’t buy anything from Europe now. I can’t—the prices are too high.” He adds that he can afford to buy only from American collectors.

Nonetheless, some auction house officials say they have seen little or no negative effect of the exchange rate on the art market, especially at the high end. Bernd Schultz, CEO of Villa Grisebach, Berlin, told ARTnewsletter, “Surprisingly the strong value shift in favor of the euro didn’t have any effect on our autumn auctions. As a rule, our customers are financially strong enough not to have to care about the exchange rates when they want to buy a singular work of art. It’s in the offer: If there is an exceptional work of art, you have to take advantage of the occasion. Otherwise you might have to wait for years—and avid collectors don’t like that.” Andree Corroon, head of public relations at Christie’s, agrees: “Great works of art sell, no matter what.”

Seemingly lower prices at U.S. galleries may help spread and elevate the reputations of American artists in Europe, but the prices of contemporary European artists’ works sold in the U.S. may be artificially inflated as a result of the weakening dollar. Dealers are conscious of trying to stabilize the price volatility caused by the exchange rate.

Observes Jill Sussman, director of New York’sMatthew Marks Gallery: “You screw up the market if you bring up the price too high too fast.” This is a sentiment echoed at other galleries. “We don’t want to lose the American market,” explains Pierre Levai, director of Manhattan’s Marlborough Gallery.

Other gallery owners also note the willingness of their artists—many of whom are still paid in dollars rather than in euros—to receive less. Some dealers of contemporary European art, however, are concerned they may lose artists to “poaching” galleries that can afford to pay the artists more.

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