Phillips 2.0: Can Auction Veteran Ed Dolman Turn Around the Art World’s Third-Place House?

On a gray Sunday last October, during Frieze Week in London, Phillips auction house opened its new headquarters in a 73,000-square-foot building on tony Berkeley Square, with renovations by architects Aukett Swanke. Visitors sipped champagne and orange juice next to a Banksy phone booth that appeared to have erupted out of the concrete floor. The future looked promising. Phillips’s former UK headquarters, near the Victoria train station, had been comparatively bare-bones and far from the action—the action in London these days being in Mayfair, site of international wealth and branches of international mega-galleries like Hauser & Wirth, David Zwirner, and Pace.

Berkeley Square is in the heart of Mayfair—Gagosian is soon to open a third London space nearby—and Phillips claimed its opening weeks saw a record number of visitors for a UK space. The inaugural sales, however, were disappointing. At the evening sale on October 15, a number of high-profile works failed to sell, among them the evening’s cover lot, an Andy Warhol Marilyn Monroe from 1986 expected to bring in as much as $2.78 million. The 37-lot sale brought in a total of only $21 million. By the new year, though, things were looking up again: following an impressive editions sale in January, Phillips’s February evening auction of contemporary art, a tight 29-lot affair, totaled $26.9 million, solidly within its pre-sale estimate, and set new records for Ai Weiwei and Mark Bradford. The house was back on track.

For a year and a half following the sudden departure of head auctioneer and former chairman Simon de Pury (along with his wife, former Phillips contemporary specialist Michaela Neumeister) in December 2012, Phillips had been in a kind of holding pattern, with longtime contemporary-art head Michael McGinnis running the show. While Christie’s and Sotheby’s saw a string of record-breaking sales—with Christie’s besting itself over and over again, most recently with a November 2014 contemporary-art sale that totaled $853 million—Phillips’s contemporary sales in New York dipped from $87 million in May 2012 to $52 million in November 2014. A $114 million sale in May 2014 was bolstered by a $56 million Mark Rothko, which was consigned by Paul Allen and carried a guarantee. In the meantime, Christie’s and Sotheby’s moved more aggressively onto Phillips turf—young art—offering wet-paint art not only in their day sales, but also in the valuable evening sales. In May 2014 Christie’s specialist Loic Gouzer organized an evening sale of newer contemporary art for the Monday night of the contemporary evening sales week, forcing Phillips to reschedule its regular sale for Thursday.

But the skies appear to be brightening over Phillips. Last summer, the company got a new CEO in 27-year auction veteran Ed Dolman. And things have started looking shaky at the other two houses. In November 2014, longtime Sotheby’s head Bill Ruprecht announced he would step down. And in early December, just as the art world alighted in Miami for Art Basel Miami Beach, Christie’s announced that its own CEO of four years, Steven Murphy, was departing. By January, art-market observers were raising questions about the houses’ profitability: with high overhead and sales that cost millions to put on, as well as the guarantees and other incentives needed to secure consignments, and money going toward things like online art sales programs, how much profit were these companies actually bringing in?

Phillips’s post-sale press conferences have long been different from the TV-camera-laden affairs at Christie’s and Sotheby’s, which offer canned quotes and Q&A sessions in the style of a White House briefing. Even under de Pury, they consisted of the mild-mannered McGinnis emerging from behind the phone bank to stand in a circle with reporters and offer thoughtful analysis. Last May, Dolman, a spry, charismatic 54-year-old Brit, not only did the same but, shortly after beginning, offered, “Shall we do this upstairs, actually? Over a glass of champagne?” The group of on-deadline journalists wended their way through the building after him and each had as much time as he or she wanted with the flute-toting incoming CEO.

Founded in 1796 by Harry Phillips, a former clerk of James Christie’s, Phillips’s history over the past couple of decades has been one of dramatic entrances and exits, and equally dramatic set changes. Auctions being in large part theater, the dramaturgical metaphor isn’t a bad one. There was the 1999 sale to Bernard Arnault’s LVMH, the grand entrance of dealers de Pury and Daniella Luxembourg in 2001, CEO Louise MacBain’s brief time on the stage (she was apparently de Pury’s girlfriend at the time), LVMH’s sale of its stake in the company to de Pury and Luxembourg, the loss of their snazzy headquarters on 57th Street, the move to scrappier quarters downtown on 15th Street, the departure of Luxembourg, the sale to Russians in 2008, the unveiling of the new Park Avenue headquarters in 2010. Since 2000, the house’s name has gone from Phillips to Phillips, de Pury & Luxembourg, to Phillips de Pury & Company, and back to Phillips. Even in this action-packed context, Dolman’s arrival last year was a climactic event. McGinnis, who has been with the company for 16 years, called Dolman’s hiring “the most exciting thing that’s happened since I’ve been here.”

Dolman spent 27 years at Christie’s, working his way up to chief executive. When Christie’s hired Murphy as CEO in 2010, Dolman was made chairman; the following year, he left for the Qatar Museums Authority. After three years as executive director there, he was looking for a new job, and a return to London and New York. “I felt, at 54, I still had another gig left in me,” he told me in February. He was, he said, close with Phillips’s owners, Leonid Friedland and Leonid Strunin, who bought the company in 2008 through their Mercury Group, a Russian luxury retail company, and who are colloquially known at Phillips as “Little Leonid” and “Big Leonid.” The Leonids, Dolman said, are hands-off and share with him a vision of “high-quality presentation.”

Dolman’s years at Christie’s coincided with a sea change in collecting habits. “The profile of the collector when I started in this business was someone fairly late in life who had gotten interested in a niche market and would spend 10 to 15 years building that collection,” he said. “But now the profile is completely different. They are much younger, they have much more money to spend, and they want to put together a collection a lot more quickly. They’re a little more impatient, and the supply problem is solved by the contemporary market.”

That “supply problem” was presumably one of the reasons Phillips got out of the Impressionist/modern business: there just aren’t enough top-quality pieces to go around. When the company was ramping up under LVMH ownership and de Pury and Luxembourg leadership, back in 2001, there was a string of glamorous Impressionist/modern sales—one of which had Sharon Stone strolling down the aisles in a grab for media attention—but the house gave up on the category in 2003.

Phillips currently sells works in only seven departments: photography, design, jewels, editions, contemporary art, Latin America, and the recently added watches. The contemporary-art department was formed in 1999 by McGinnis. “It was really an entrepreneurial excursion for me,” McGinnis said. “I’d worked at Christie’s. I left there on a Friday and started here on a Monday and, with my book of clients, built a little mini-empire in a category that wasn’t the most important at our competitors’ houses. Focusing on cutting-edge contemporary—let’s call it Pop through the present—I made a lot of headway and built up a loyal following of consignors and buyers.”

The Christie’s and Sotheby’s “business models need adjusting,” Dolman told the Art Newspaper a few months ago. “They need to shrink their cost base.” The paper’s market editor, Melanie Gerlis, wrote, “Dolman believes that the ‘massive change in taste’ towards contemporary and Modern art should lead to certain departments going.” Christie’s and Sotheby’s “could shed half of their business,” Dolman told the paper, citing furniture and Old Masters. Sotheby’s, the Art Newspaper pointed out, has around 1,600 employees; Christie’s has around 2,200. Phillips has 200. In February, on the heels of that successful sale in London, Dolman talked to The New York Times, pointing to online sales as a possible reason for Murphy’s departure from Christie’s. Murphy “came in from the outside,” Dolman told The Times. “There is something to be said for mixing the gene pool, but the auction business is a tough place to establish credibility if you are not versed in it. He was very keen on developing online sales. Perhaps we should look there.”

“I’ve been in the auction world a long time,” Dolman told me in February, “and I enjoy it a lot. I watched Phillips evolve as a business with great interest from my desk at Christie’s, constantly thinking about the potential it had then as a competitor.” The potential he seems most eager to tap is global in nature. In the fall of 2015, Phillips, which currently has salesrooms in New York and London, offices in Berlin, Geneva, Moscow, and Paris, and representatives in Brussels, Istanbul, Denver, Los Angeles, Portugal, Milan, and Zurich, will open a Hong Kong salesroom. It is a clear move toward competing head-on with Christie’s and Sotheby’s in Asia, and toward diversifying the company’s client base (which has a reputation for being overwhelmingly American, though McGinnis said this wasn’t true).

In December, Phillips announced that Dolman had hired Matt Carey-Williams, a former director of mega-galleries White Cube, Gagosian, and Haunch of Venison, and a veteran of Sotheby’s, as his deputy chairman for Europe and Asia. (Perhaps unsurprisingly, given his comment about Christie’s, online would seem to be one place Dolman won’t be branching into. The company has only ever done one online-only sale—in December 2014—and Dolman sees the live auction business as “alive and well.” When you’re talking about people who can buy something for more than $5,000 without actually seeing it, he said, “it’s a much more limited marketplace.”)

Carey-Williams sees Phillips’s goals in China as different from those of the other two houses, or those of anyone who thinks “the only people from Asia looking to bid on art are the ones looking to buy $100 million Bacons.

“That could not be further from the truth,” he said. “I think your average collector in Hong Kong is going to be more interested in owning a piece by Jonas Wood, or Tauba Auerbach, or Julie Mehretu than they are in owning a $20 million [Piero] Manzoni, or a $30 million Gerhard Richter.

“This is a marketplace that’s been very sophisticated for a long time,” he continued, pointing to collectors like the Chinese Indonesian entrepreneur Budi Tek, who is known for his acquisition of challenging, monumental works by contemporary artists like Maurizio Cattelan and Anselm Kiefer, and who recently opened a private museum in Shanghai and is planning an art park in Bali. “It’s just that there haven’t been many people operating there.”

For Phillips, there is a lot of potential in China. “Some of our biggest clients are people who have yet to buy,” he added.

Carey-Williams said that in China and elsewhere Phillips hopes to attract new audiences by becoming an “arts destination” that will go beyond auctions to offer a variety of services, from private sales to education. Both he and Dolman were cagey on the details, but the subtext—a rebranding—can perhaps be read in the tea leaves: another Dolman hire is Damien Whitmore, who worked on branding for the Victoria & Albert Museum as well as for Tate, and was involved with the launch of Tate Modern.

“I want Phillips to be seen, going forward, as a very serious and real part of the art community,” Dolman said. “Not just as auctioneers, but broader.” Part of his strategy is a course that Phillips has used before, under de Pury: the guest curator. In 2010, Phillips brought in art advisor and former Christie’s contemporary-art head Philippe Segalot to curate an evening sale. Dolman’s approach is a bit different. He has engaged Francesco Bonami—a former Flash Art magazine editor and, from 1999 to 2008, senior curator at the Museum of Contemporary Art, Chicago, who curated the 2003 Venice Biennale and the 2010 Whitney Biennial—to curate a series of exhibitions. The first of these, “A Very Short History of Contemporary Sculpture,” inaugurated Phillips’s new London headquarters last fall. Little in that exhibition, which included work by Dahn Vo and Matthew Barney, was for sale—it was more of a backdrop for the sales—but the show Bonami is putting together for Phillips in New York at the end of April will be a selling show, with work by the likes of Paola Pivi, Roberto Cuoghi, and Cattelan.

At the other end of the collecting spectrum, Dolman is branching out into watches. In November, Phillips announced that it would open a Geneva space in partnership with Livia Russo and Aurel Bacs, who spent a decade as international head of watches for Christie’s, bringing the department’s revenues from $8 million to $130 million annually.

“Phillips is in a very special place right now,” Dolman said, “and I’m really looking forward to the next two to three years. I think if we are successful the market in general will benefit from it. It might be a grandiose thing to say, but I think injecting a little more competition and a little more choice will be good for everyone. And that’s what we’re trying to do.”

Dan Duray is senior staff writer at ARTnews.

A version of this story originally appeared in the April 2015 issue of ARTnews on page 66 under the title “Phillips 2.0.”