NEW YORK • When fashion designer Tommy Hilfiger wanted to sell five works from his collection of pop and contemporary art at auction this autumn, he considered Sotheby's and Christie's, but ultimately took them to Phillips, long considered a distant third behind those two behemoths.
"I decided this would be the best house," he said. "They did a great job."
The works - by Jean-Michel Basquiat, Andy Warhol, Jean Dubuffet, Keith Haring and Damien Hirst - ultimately sold in Phillips' 20th Century & Contemporary Art evening sale on Nov 16 for a combined US$7 million (S$9.9 million) - a small sum compared with the astronomical prices that art has been commanding at auction these days.
But by positioning itself as a boutique house that would show the relatively modest collection some marketing love, bring to bear the expertise of its new team of contemporary art specialists and include an undisclosed guarantee for the Basquiat, Phillips won the consignment. The piece, Untitled (Devil's Head), sold for US$3.6 million on a low estimate of US$3 million.
Phillips' forthright use of guarantees, as well as its roster of new specialists able to attract high quality material, succeeded in making the auction house a player this season.
"They definitely stepped up their game," said Mr Alex Rotter, who recently left Sotheby's to become chairman of post-war and contemporary art at Christie's Americas.
Phillips was the only auction house whose contemporary and 20th-century total was up this season, over the equivalent sale last year (by 66 per cent, from US$67 million to US$111.2 million).
Phillips' sale was also 92 per cent successful and captured 17 per cent of the market share for all contemporary evening sales last month, a 10 per cent increase from a year ago.
"That last sale was by far the best sale they've had," said art dealer Larry Gagosian. "You opened the catalogue and there were things you really wanted - it did not look like a bunch of things dealers were trying to unload. The material looked fresh."
The auction house, which is privately owned by Russian luxury retail group Mercury, is investing and expanding rapidly in Asia. On Sunday, it held its first full contemporary-art sale in Hong Kong, which totalled US$19.6 million (the low estimate was US$13.8 million) and had a respectable 82 per cent success rate.
Phillips' watch department is the world leader. This month, it set an auction high with a Patek Philippe that brought US$11 million, thanks to Phillips' partnering with the team of Mr Aurel Bacs and Ms Livia Russo, who formerly led Christie's international watch department. This helps the auction house broaden its client base, as watch collectors often also collect art.
And Phillips' design and photographs departments are already competitive.
To be sure, there was not a flurry of bidding throughout last month's sale. Phillips' top lot - Gerhard Richter's 1963 painting, Dusenjager, consigned by Microsoft co-founder Paul Allen - sold on a low-estimate bid of US$25.5 million with fees to its third-party guarantor, based in Asia. (The buyer received about US$1.6 million from Phillips for serving as the guarantor.)
But the auction house also sold its first work by abstract expressionist painter Clyfford Still after multiple bids - albeit to the guarantor.
"There was quite a bit of bidding on quite a few lots at the sale," said Mr Edward Dolman, who became chairman and chief executive officer of Phillips in 2014, "but the air remains thin right at the top end".
Over the past year, the two big auction houses have been wrestling with the issue of competitive guarantees: They are reluctant to offer these minimum prices, which can eat into profits, but are also compelled to give them to secure blue-chip consignments.
Phillips, however, does not hesitate to rely on guarantees, even as it tries to offload some of the risk to third parties. Thirteen of the 37 lots in last month's sale had guarantees - 10 by third parties and three by the house.
"Guarantees are here to stay - it's something all our clients want to consider," Mr Dolman said. "Success is in making the right decisions around those guarantees - making sure the risks are laid off, if you can lay them off and not expose the company to huge losses if you get it wrong."
Phillips acknowledges that these are early days in Mr Dolman's tenure. Many of the specialists he has lured away from other houses only recently took up their new positions after completing their non-compete agreements.
In 20th-century and contemporary art, this crew includes Christie's alumni - Mr Jean-Paul Engelen and Mr Robert Manley - and former Sotheby's experts - Mr Scott Nussbaum and Mr Jonathan Crockett, who is based in Asia.
Ms Cheyenne Westphal, Sotheby's former worldwide head of contemporary art, and Ms Marianne Hoet, previously an international director at Christie's, begin positions at Phillips next year.
"What people don't understand about this business is it needs an absolute core of infrastructure," Mr Dolman said.
Phillips took some risks in its contemporary evening sale this season that paid off, such as featuring two lesser-known artists, Carmen Herrera, a Cuban-American abstract painter; and Mira Schendel, a Brazilian artist, who both would have typically been featured in a Latin American sale, but here sold at auction highs.
"It was great to put these amazing women artists on a platform with Richter and Dubuffet," Mr Manley said. "Starting next season, we're going to break down those boundaries more and more."
The Phillips specialists acknowledge that last month's sale was only an opening move. The larger effort to disrupt the duopoly has just begun.
"We're still in this phase when we get the sympathy vote," Mr Engelen said. "I don't think it's a giant leap. It's just a good step to take."
"As long as we have a seat at the table, that was the whole point," he added.
"Let's get a seat at the table."
NYTIMES
