The importance of provenance in the luxury market
When you’re looking to buy or sell a luxury item, such as a piece of art, a fine watch, or a precious stone, there are a number of factors that can affect its value. These could include the prestige of the person who created it, its age, whether it is unique or not, and the condition it is currently in, as well as many more. One key factor in an item’s value is its provenance, but exactly is it, why is it important?
What is it?
Put simply, provenance is the history of an object’s ownership, and where it originated. This may seem like an odd thing to focus on, but the reality is that a prestigious provenance could be the difference between an item being worth a small fortune, and being nearly worthless. A great example is the sale of two cookie jars, once owned by Andy Warhol, for nearly a quarter of a million dollars. Had they not spent time sat in Warhol’s kitchen, they’d have struggled to fetch $40.
It’ll be interesting to see how the provenance of David Bowie’s art collection — due to go on sale at Sotheby’s — affects the price of the works.
Two primary entries in an item’s provenance will increase its value. Firstly, if it’s passed through the hands of a celebrity, historical figure, or someone else of note, its price is likely to shoot up, as is evidenced with Warhol’s cookie jars. It could also have passed through the hands of a prestigious collector, or gallery. Secondly, if the piece has previously been sold by a prestigious dealer or auction house, its value could also increase.
Why is it so important?
Provenance is important for a number of reasons. The first, and most important, is that it proves the item is authentic. If the seller of an item has provenance documentation that proves exactly where it has been throughout its existence — from creation to the time it arrived in the hands of the seller — you can be fairly confident in its authenticity. If there are gaps in the documentation, that’s when you should start to query the legitimacy of the item.
If the seller also has all of the provenance documentation, it proves that the piece isn’t stolen. This is especially important if you’re thinking of buying an item. If you buy an item that turns out to be stolen, and you don’t have the provenance documentation, you may not legally have the right to own it. If you’re selling the item, this is important too. Lacking this information may scare off legitimate interest from collectors who don’t want to buy a stolen or counterfeit piece.
Provenance documentation also confirms any claims by the seller that the item has passed through the hands of somebody notable. It’s all very well a dealer telling you that the brass goblet he’s trying to sell you was once used by Henry VIII, but unless he has evidence to support it you should treat it as fiction.
So, provenance documentation is incredibly important for numerous reasons. But what kind of documentation is acceptable?
How can you prove an item’s provenance?
Here is a list of provenance documents that are acceptable. It’s good practice to build a portfolio of such documents for each item if you’re selling, and to demand a number of documents from sellers if you’re buying.
Receipt, Invoice, or Bill of Sale: This one is vital for any item. A proof of purchase proves that the seller is the legal owner of the item they are selling, and therefore has a clear title for the object that can be legally passed to the buyer upon purchase. This can also confirm the date that an item has changed owners, and the identity of the parties involved, such as a private owner, gallery, or auction house.
Catalogues Raisonnés: If the item is a piece of art, this is a key piece of provenance documentation. Translating into English as ‘the list’, this is a comprehensive, annotated listing of all the known artworks by an artist. The works are described in such a way that they may be reliably identified by any third party. Compiled by experts, they contain comprehensive information, including provenance, for each artwork or item officially recognised as having been created by the artist or maker at the time of publication. An expert will often begin their research by looking up an object in a catalog raisonné.
Appraisal: An object may have been previously appraised for insurance reasons, as part of an estate, or if the owner wanted to discover the item’s value at that time. An appraisal is a good piece of provenance to document the age and ownership of an object, but any value given on the appraisal should not be considered as the current value.
Archive: Most fine watch, jewelry, and fashion brands have a detailed archive of their inventory. Most brands can trace the existence of one of their products from the maker’s marks, model reference or just visual inspection. Using this documentation, a potential buyer can confirm when and where an item was produced and confirm its authenticity.
Proof of sale at auction: If an item has been previously included in an auction, the sale result is usually available online, or from the auction house if you contact them directly. Most major auction houses publish catalogs, which contain photography of every item in a particular sale.
Proof of exhibition at a museum or gallery: If an item has been included in a museum or gallery exhibition, it probably would be mentioned and usually illustrated in a catalog or book published along with the exhibition.
Inventory number from a museum or corporate collection: Items that are held by museums or corporate collections are given inventory numbers. These numbers accompany the item when it leaves the collection. They can verify that the object was part of this collection during a specific time period.