Tough economic times may trigger corporate sell-off of art

LONDON — Corporations worried about the bottom line are taking a look at their office walls.

Over decades, many of the world’s wealthiest banks and companies have built up art collections, rich in modern masters, that are the envy of many museums. Now, some are selling off works that adorn offices and boardrooms — some from choice, but others to pay off hungry creditors.

The latter category includes collapsed bank Lehman Brothers, whose multimillion-dollar collection of works by Damien Hirst, Gerhard Richter and others is going under the hammer next month.

“Over the last five or six years we’ve dealt with more and more corporate as well as private clients,” said Saul Ingram, head of European corporate art services at Sotheby’s auction house.

“Obviously there have been economic changes in the last couple of years, and I think that has heralded a change in attitudes — that these collections need to be trimmed, to focus on quality.”

Cathy Elkies, head of private and corporate collections at Christie’s, also says she has seen an increase in the corporate side of the business, and expects it to continue.

“In some cases, organizations are editing and refocusing their collections,” she said. “Others are looking to completely divest themselves of their art offerings.”

Corporations collect art for a variety of reasons, of which turning a profit is often the least important. Some companies like to see supporting emerging artists as a form of corporate social responsibility, or philanthropy — works can be lent to museums and galleries for shows.

Others use art to flaunt their corporate wealth. Fred Goodwin, former chief executive of the once high-flying but now state-owned Royal Bank of Scotland used to boast about the David Hockney in his office.

Sometimes, art is used to enliven the work environment. Half a century ago, industrialist Alexander Orlow adorned the walls of his Turmac tobacco factory in the Netherlands with bright abstract works — inspired by the theme “joie de vivre” — to cheer his workers.

British American Tobacco later acquired the company and closed the factory. In March, BAT sold more than 160 of the artworks at auction for more than $17 million.

“We want our offices to be an interesting and stimulating environment,” said Robert Korzinek, a fine art underwriter at Hiscox, which is both an art insurer and a collector, with a trove of contemporary works by Gavin Turk, Grayson Perry and others. “It’s aimed at stimulating our staff, and stimulating our guests.”

Around the world, companies are sitting on artistic riches that the public seldom sees. The JP Morgan Chase Art Collection, founded by David Rockefeller in 1959, has 30,000 pieces, including works by Jean-Michel Basquiat, Cindy Sherman and Andy Warhol.

In Britain, the banks RBS, HSBC and Barclays all have large caches of art — unlike BP PLC, which despite drawing protests from environmentalists accusing it of using art sponsorships to whitewash its oil-stained image, doesn’t have a large corporate collection of its own.

“In certain of our buildings around the U.K. and elsewhere there are pieces of art,” said BP spokesman David Nicholas. “But there are also many, many photos of oil platforms.”

Germany’s Deutsche Bank began collecting art in the 1970s and now has a trove of more than 56,000 works, by artists including Joseph Beuys, Henri Matisse, Nan Goldin, Jeff Koons and Lucian Freud, displayed on the walls of its offices and branches in 48 countries.

When companies go under, it can trigger an art market bonanza. In December, bankruptcy administrators of troubled Italian airline Alitalia sold a collection of Futurist artworks for 1.2 million euros.

In June, Sotheby’s sold 1,000 photographs by Ansel Adams, Dorothea Lange and other lens masters as part of a bankruptcy court-approved sale of the collection of defunct camera-maker Polaroid.

The tradition of corporations buying art in good times — and selling it in bad — stretches back decades. One pioneer was IBM president Thomas Watson, Sr., who amassed works by Frida Kahlo and other artists to decorate the IBM pavilion at the 1939 World Art Fair in New York. In the 1990s, a cash-strapped IBM sold its collection through Sotheby’s for $31 million.