Russian troops had only started invading Ukraine when executives at Phillips auction house realized they had a problem.
Public sentiment was building against Russian oligarchs and interests. Sanctions were being levied, assets frozen. Some collectors voiced concerns that Phillips was owned by two wealthy Russians who also control one of that country’s largest luxury retail companies, Mercury Group.
“We had to make sure people realized what side we were on,” said Ed Dolman, executive chairman of Phillips, which does most of its business out of New York and London. “There were a lot of discussions that took place right across the company.”
On Feb. 28, four days into the invasion, Phillips issued a statement online that condemned the war and featured the Ukrainian flag. Auction house executives were soon reassuring clients that the business was financially stable.
Then, just hours before a big London evening sale of contemporary art on March 3, the company announced it would donate all of its earnings from the auction to the Ukrainian Red Cross Society. By the end of the sale, this amounted to $7.7 million in fees.
“They dodged the bullet right then,” said Josh Baer, a New York-based art adviser and commentator, who has negotiated sales through Phillips. “They got out in front of it with their remarks and their donation.”
It is difficult, given the opacity of the art market and the constraints on excavating the financial details of private companies, to state with any certainty that Phillips has been left undamaged by the war and by calls from some to boycott its services. But that is what the company has declared, and that is what the publicly accessible metrics would seem to support, so far.
At auctions in London this month, there was no sign that consignors or collectors had abandoned the company. On March 4, it recorded its largest ever total for a London day sale, and at a charity auction in London this week, all 15 lots were sold.
At the London evening sale on March 3, five lots were withdrawn, but Phillips said financial, rather than political, considerations had prompted consignors to pull the lots from the auction, which took in $40 million.
The works “did not elicit the interest we had hoped for, and as a result we advised the consignors to withdraw in advance,” Phillips said in an email.
The auction season is far from over, though. Coming up in a few weeks are the spring sales in New York, where the prices secured for the big-ticket items go a long way toward determining an auction house’s bottom line.
Matthew Girling, the former chief executive of Bonhams, urged collectors to boycott Phillips, in an interview with The Art Newspaper, suggesting that only that “will get the attention of the world and the owners of Mercury to hopefully influence Putin to change his current chosen course of action.”
A major collector, Andy Hall, agrees, despite having been called by a Phillips executive after he pointed out the company’s Russian ownership online. “I don’t think anyone should be doing business with Russia at the moment,” he said in an interview.
“The art world loves to present itself as woke and politically in the right place,” he continued, “but here to my mind it’s complete hypocrisy that people are happy to keep on buying and selling art through this Russian-owned entity.”
The British-Indian sculptor Anish Kapoor also weighed in. “Putin’s cronies are a legitimate target wherever they are,” he said in an email. “Phillips is as good a target as Chelsea football club,” he said, referring to a soccer team owned by Russian billionaire Roman Abramovich, whose assets were frozen this month by Britain. Abramovich is currently trying to sell the team.
The two Russians who own Phillips, and control a business empire in Russia — Leonid Friedland and Leonid Strunin — are not on the same plane as Abramovich, though. They are very wealthy, collect art and have a large footprint in the Russian economy, but they are not viewed as politically influential oligarchs and have not been placed under sanctions. Phillips said its owners “have no political or business connection to the Russian government.” And they have now, with the statement posted on the company’s Instagram page, put themselves at odds with President Vladimir V. Putin of Russia.
“We at Phillips unequivocally condemn the invasion of Ukraine,” the statement from Stephen Brooks, the company’s chief executive, said.
“Along with the rest of the art world, we have been shocked and saddened by the tragic events unfolding in the region,” the statement continued.
Dolman said the owners had insisted the company give away all its fees from the March 3 London auction as a donation to the Ukrainian Red Cross.
Friedland now resides in Monaco and Strunin in Cyprus, according to British corporate records. But their business presence in Russia is expansive and high-profile. The Mercury Group, which they founded in 1993, is one of the largest distributors of high-end clothing, jewelry and other luxury goods in Russia, and it operates dozens of boutiques around the country. Their department store, TsUM, sits in the middle of downtown Moscow near the Bolshoi Theater.
In auction season, the owners have been known to show up at sales and hang out in the wings, though it is unclear whether they will be present in New York on May 18 when the gavel first comes down at Phillips’s marquee sale of the year, the evening auction of 20th-century and contemporary art. Neither man responded to requests for an interview.
Leading that sale will be Jean-Michel Basquiat’s monumental 1982 painting of a horned devil, “Untitled,” which looks certain to achieve at least $70 million, courtesy of a third-party guarantee, which would make it the most expensive work Phillips has ever sold. The work’s consignment, by the Japanese billionaire collector Yusaku Maezawa, was announced on Feb. 28, four days after the Russian invasion, which the company cites as additional evidence of confidence from the art world.
Dolman said there have been no major withdrawals from that sale but declined to be more specific. Phillips said that consignments, currently at about half of last year’s tally of 48, are still coming in. Already, projected total sales are expected to top the $118.2 million achieved at the same sale last year, according to the company.
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Valentin Silvestrov. Ukraine’s best-known living composer, Mr. Silvestrov made his way from his home in Kyiv to Berlin, where he is now sheltering. In recent weeks, his consoling music has taken on new significance for listeners in his war-torn country.
The Phillips team, Dolman said, had not used financial inducements to keep consignors from withdrawing their works. “We’ve stuck to our standard conditions of sale and payments,” he said.
But they have worked, he acknowledged, to distance the auction house and its owners from the war.
“We’re obviously conscious of the fact that the whole world is aghast at Russia and what is going on,” Dolman said. “It would be easy to tar every Russian national with the same brush. It would condemn a whole nation to isolation.”
“Phillips’s owners,” he added, “are appalled by the events.”
A portion of the auction house’s durability during the crisis, some experts said, is based on the fact that many art-world denizens view Dolman and Brooks, who are both former senior Christie’s executives, and their team as the face of Phillips, not the Russians who own it.
Peter Brant, a major collector who traveled this month to the Hungarian border to deliver supplies to Ukrainian refugees, said he does not support a boycott of Phillips. Though he hasn’t done much business there in recent years, he said he had a high opinion of the company’s staff.
“If they are boycotting,” he said, “that will be difficult for them, but they are very resourceful people. They will do everything they can to counteract that.”
The artist Ai Weiwei said in an email response to a question that he does not support boycotting “a private enterprise simply because it is owned by Russians.”
“In fact, this kind of boycott is overbearing and bullying,” he said, adding that “its core is racism, discrimination, and political correctness.”