Sotheby’s decision to refund a private sales client for the $10m purchase price in a recently ‘discovered’ Frans Hals from the collection of Giuliano Ruffini has inadvertently revealed some of the pricing anomalies of the art market.
According to Bendor Grosvenor, writing in the Financial Times, the Hals was offered to the Louvre in 2008 for €5m. The Museum could not buy it then and the painting was sold, sometime between 2008 and 2011, to dealer Mark Weiss for €3m, a 40% discount over the museum’s price.
Then, through Sotheby’s, the work was sold in 2011 for $10m. That’s a nearly 150% gain in fewer than three years. Weiss paid approximately $4.1m in 2011 based upon the prevailing exchange rates. The $10m sale translated into around €7.2m minus whatever Sotheby’s took as a private sale commission.
The Art Newspaper thinks Sotheby’s made a 50% commission on the sale. Sotheby’s denies this saying, “The Art Newspaper comment is total speculation and our commission was a fraction of that amount.”
The painting was sold in 2011 by Sotheby’s and the London dealer Mark Weiss to Seattle-based collector Richard Hedreen for $10m. It was purchased for €3m by Mark Weiss from Giulano Ruffini, whose estate near Parma was raided by French and Italian police last April. Before that, the Louvre had tried to buy the portrait, which was declared a “national treasure” in France.