Korean galleries band together to hold an event in protest of auction houses
In a gesture of protest against major Korean auction houses, the association of Korean commercial galleries will hold its first-ever auction next Wednesday. Coincidentally, the auction’s preview will start on Monday, when K Auction, one of the nation’s two biggest auction houses, is scheduled to make its stock market debut, helped by the boom of the local art market last year.
The Galleries Association of Korea claims that Seoul Auction and K Auction, which lead the secondary art market, or resale of art that has been sold at least once before, have recently been “infringing on” the primary art market, or the first sale of art, which they consider is the galleries’ territory.
“For sustainable growth of the art market, the players of the primary and secondary markets should co-exist, while doing separate and different roles,” Hwang Dal-seung, chairman of the association and founder of Keumsan Gallery, said in a press conference on Tuesday.
“We have received reports from our members [galleries] that the auction houses are asking some young and emerging artists to sell their new works directly to them,” said Kim Jeung-sook, general director of the association and director of Duru Artspace, during the press conference. “Such an act is harmful not only to the galleries but also to the artists, in particular, young artists.”
Commonly, young artists build their careers and raise degrees of recognition through solo shows at commercial galleries and participation in museums’ group shows, biennales or public art projects. If an artist and a commercial gallery make an exclusive contract, the artist is required to sell their works only through the gallery, and the gallery is required to hold the artist’s solo shows and to support the artist’s activities at public fields as the artist’s agency.
However, in Korea, many artists and commercial galleries don’t make an exclusive contract but rather tend to collaborate based on loose contracts. Accordingly, auction houses can offer to buy works directly from an artist’s studio without concerns of legal disputes. Still, it is dangerous for young artists, according to the view of not only galleries but also art market experts.
“It is very encouraging that art sales through auctions in Korea almost trebled last year from a year earlier, despite the economic slump amid the prolonged pandemic situation,“ said Kim Yeong-seok, head of the Korea Art Price Appraisal Association (Kapaa), in a market report released by the association on Dec 31. “However, the auction markets for some young artists seem to be excessively overheated, which I am afraid could develop into art speculation.”
“When young artists are evaluated only by the prices of their works at auctions, without being evaluated in terms of artistic value by art critics and the public through solo shows of galleries, they cannot grow further as an artist in the long run,” Kim of the Galleries Association of Korea said. “Such artists become directly exposed to the market fluctuations and can be hit hard by a market bubble.”
According to the Kapaa report, the nation’s eight auction houses sold 329.4 billion won ($277 million) worth of artworks last year, compared to 115.3 billion won in 2020. The sales even doubled from 156.5 billion won in 2019 before the Covid-19 pandemic hit. Kim and other market experts cited abundant market liquidity; the increasing interest in art collecting since the donation of the late Samsung Group Chairman Lee Kun-hee’s art collection last April; and the rise of new collectors in their 20s and 30s, among other reasons.
Amid the market prosperity, Seoul Auction and K Auction, which together account for 92 percent of Korea’s auction market, made aggressive moves. Seoul Auction, with a 50.6 percent market share, held seven major auctions in addition to many smaller and online auctions last year. It held four major auctions the year before. K Auction, with a 41.3 percent market share, held 11 major auctions last year, up from six auctions per year in previous years. In addition, the auction house held a total of 80 auctions last year, according the Galleries Association of Korea.
As the auctions were generally successful, the stock price of Seoul Auction listed on the Kosdaq soared almost fivefold to 34,200 won on Dec. 30, 2021, from 7,440 won a year earlier. Apparently encouraged by this, K Auction, founded in 2005 and not yet listed, conducted its initial public offering (IPO) last week. Over the two-day offering, the auction house raised more than 5 trillion won in subscription deposits. The stock will start trading on the Kosdaq on Jan. 24.
However, the increase in the number of auctions will press the houses to seek more direct purchases of artworks from artists and press artists to produce more works in the short term, while causing a shortening of trade cycles of each artwork, the Galleries Association argued.
“After seeing a similar phenomenon during the art market boom in 2007, we and the two auction houses made a ‘gentlemen’s agreement,’ at that time,” Hwang explained. The agreement stipulates that the two auction houses should limit the number of auctions to four a year and that they should not sell art directly purchased from artists. “But the auction houses are not observing the agreement,” Hwang said.
“That’s why we galleries decided to hold our own auction event,” he continued. “We don’t intend on starting an auction business in earnest or to make profit from the event. The event is a kind of message to press the two auction houses. We are also talking with them.”
“We also want to talk with the Galleries Association,” a director of Seoul Auction Chey Youn-seok said. “We know the roles of auction houses and galleries are different from each other. But there can be overlapping or conflicting points. We want to resolve these problems through talks with the galleries.”
The Galleries Association will hold the auction at the Westin Josun Seoul on Jan. 26, one day before a major auction by K Auction on Jan. 27. About 120 works will be offered by 90 galleries among the 160 members of the association at the auction.
BY MOON SO-YOUNG [firstname.lastname@example.org]