Chairperson's Report

30 Jan 2024

I am pleased to present this Chairperson’s Report for the trading year January to December 2023. Strauss & Co enjoyed another brisk year of trade. We successfully hosted 57 auctions of modern and contemporary art, decorative arts, jewellery and fine wine, including six charity auctions.

Notwithstanding significant headwinds, our total revenue increased by 2% compared to the previous year, reaching R363.7 / $19.7 million from 5 457 lots sold (excluding turnover from charity auctions sold at 51 auctions). We sold 12% fewer lots than in 2022 – a pleasing improvement on value per lot sold.

We continued to optimise our business processes and organisational structure, notably appointing two new members to our Board of Directors, and decisively settling into our new Cape Town premises.

Selling art in unpredictable times

Before I discuss in greater detail Strauss & Co’s key economic achievements and strategic initiatives in 2023, I want to reflect on the wider trading landscape.

Globally, inflation showed signs of easing in the second half of the trading year (H2), albeit in a fragmented manner. Unpromising factors like slowing economic growth in China and war in the Middle East however impacted on market sentiment, especially in H2. In South Africa, the country’s economy experienced additional stresses due to sustained high interest rates, deteriorating public infrastructure and irregular power supply.

These factors led to softer demand for goods handled by Strauss & Co, notably in H2. We were not alone in negotiating market turbulence. Journalists and economists reported indifferent demand at auctions globally throughout 2023. Aggregate sales at major international auction houses were down by 16% in H1, with results in H2 showing little sign of improvement.

Despite continuing political headwinds and economic uncertainties, Strauss & Co responded to these macroeconomic conditions with resilience and adaptability.

Headline achievements for 2023

The total revenue including charity auctions, from which Strauss & Co does not profit but nevertheless consume considerable time and resources, was R372.8 / $20.2 million* from 5 687 lots sold at 57 auctions.

Our profitability also remained resilient. This positive bottomline outcome is the result of disciplined cost management, fiscal and operational efficiency, and a consistent focus on delivering value to our shareholders.

We continued to invest in a very targeted fashion in the fitout of our offices in Cape Town and Johannesburg, deepening and optimising the technology stack that drives our operational and performance capacity. We also invested in training and development of our people and in expanding our international footprint by establishing an office in the United Kingdom and representation in the United States.

Demand persists for collectable art

The art market was subdued in 2023, but passion for quality art endures. Collectors are judicious and there was strong demand for artists with institutional pedigree. We saw robust bidding for works by artists with significant museum presence, from Irma Stern and Sydney Kumalo to William Kentridge and Cinga Samson.

At a time of restrained demand, it was particularly encouraging to note strong interest in BIPOC (black, indigenous, and people of colour) artists, in particular historical black modernists. There was sustained demand throughout 2023 for paintings by George Pemba, Gerard Sekoto and Moses Tladi, works on paper by Dumile Feni, and sculpture by Sydney Kumalo and Ezrom Legae.

Interest in work by Esther Mahlangu, an artist who effortlessly straddles the modern and contemporary art categories, was also robust. We achieved South African records for Sethembile Msezane, Richard Mudariki, Simphiwe Ndzube and Cinga Samson. This is cause for optimism in 2024, and beyond.

Strategies for maximising visibility

Before I discuss notable individual sales in 2023 it bears stating that auctioneering is not a passive business. It demands focussed sales and marketing strategies aimed at maximising the visibility and context of individual lots. The goal is to achieve the best-possible value for our clients while participating in the market in a sustainable manner. Our passion and flair for selling collectables enabled us to achieve this mission in a time of recessionary behaviour.

Building on lessons from the past few years, in 2023 we continued to present creatively themed auctions of new-tomarket work. Some standout auctions included Curatorial Voices: Modern and Contemporary Art from Africa in February, Rare and Fine Wine from Italy and Spain in May, JH Pierneef: Close to Home and C. 100 Sculptures, both in July, Mid-Century Modern Furniture in September, Transcending Boundaries: International Modern and Contemporary Art in October and Young Guns and New Wave Producers in November.

These auctions consistently attracted new bidders and buyers, both from within South Africa and internationally. Bidders from more than 20 countries vied for lots in Transcending Boundaries, our innovative auction of modern and contemporary art from the Americas, Asia Pacific, British Isles and Europe. More than half of successful bids in this landmark auction featuring a work by Pierre-Auguste Renoir were placed by new buyers.

New buyers also accounted for a fifth of the sales in Defining Impressions: A Selection of Prints from South African Studios, a standalone auction of rare and collectable works on paper held in November. Our themed wine auctions similarly attracted large audience interest. All the wines in our May sale of rare and fine wines from Italy and Spain sold, indicating a deepening of our access to international fine wine collectors.

Much of our efforts in the future will be aimed at retaining and deepening the relationship with our loyal Southern African client base, and increasingly in attracting new clients based on the continent and abroad. This will be vital for the sustainability of the African art market and is key for Strauss & Co in achieving our vision to be the most dynamic auction house in Africa, driven by expertise, technology and commitment to excellence.

Noteworthy art sales in 2023

Historically, art accounts for the lion’s share of Strauss & Co’s turnover. In 2023, we hosted 24 dedicated auctions of modern and contemporary art. Gratifyingly, we continued to find buyers for high-value paintings and sculpture. We achieved record prices for works by, among others, Dumile Feni, JH Pierneef, Pierre-Auguste Renoir, Cinga Samson, Irma Stern, Ruby Swinney and Vladimir Tretchikoff. We also affirmed the market status of artists such as William Kentridge, George Pemba, Alexis Preller and Gerard Sekoto.

In March, we sold Irma Stern’s Children Reading the Koran, a devotional scene painted in 1939, for a new African record price of R22.3 / $1.227 million. In May, an exile-period colour work on paper by Dumile Feni sold for R2.3 million /$119 805, a world record. In October, a South African collector acquired Pierre-Auguste Renoir’s Fruits (Oranges et Citrons) from 1912 for R4.575 million / $238 300. Strauss & Co was the first auction house on the African continent to successfully offer a work by this French master.

Our commitment to contemporary art remains steadfast. In February we achieved South African records for a host of contemporary painters in our Curatorial Voices auction. I will return to this auction shortly. In November William Kentridge proved his international star appeal at Johannesburg Auction Week, topping the rankings of both our premier evening sale and Defining Impressions, a specialist print-making sale.

These superb individual results confirmed Strauss & Co’s role as Africa’s leading auction house for modern and contemporary art. Looking beyond the records, I was gratified by the impressive performance of earlier 20th-century African modernists like Ben Enwonwu, Sydney Kumalo, Freida Lock, Hugo Naudé, Cecil Skotnes, Moses Tladi, Vladimir Tretchikoff, Edoardo Villa and Pieter Wenning. There can be no doubt that Strauss & Co remains the best marketplace to trade artworks by important African modernists.

Important wine sales in 2023

Now in its fourth year of trading, the wine departmentcontinued to achieve solid results. We hosted 17 wine auctions and three charitable auctions. The strong results achieved in H1, notably from a single-owner private collection of South African and French wines (93% of lots sold) and collection of fine wines from Italy and Spain (100% of lots sold), persisted throughout H2.

Noteworthy sales in H2 included a Chenin and Pinotage auction in September (95% of lots sold) and Burgundy and Champagne auction in October (77% of lots sold). Among the individual winemakers offered at auction in 2023, collectable vintages from Kanonkop, Sadie Family and Meerlust continued to rank among the top local producers sold.

Our wine department coordinated both the Nedbank Cape Winemakers Guild Auction and Cape Winemakers Guild Protégé Online Auction, achieving 100% lots sold at each. Charitable initiatives are integral to good corporate citizenship and Strauss & Co also successfully handled another edition of our collaborative wine auction with Dan Nicholl and The Nicholl Foundation.

Notable design sales in 2023

Strauss & Co presented ten auctions of decorative arts and jewellery in 2023. The year began with a succinct offering of works by pioneering ceramicist Esias Bosch in February, and concluded in November with two auctions, including a specialist presentation of Chinese Pottery collected by a European collector.

A focus on Cape Furniture and Metalware in July achieved 83% lots sold. In September, a presentation of collectable mid-century modern furniture by a cohort of illustrious European designers yielded impressive individual and overall results, with 86% of lots sold. I credit our robust systems and commitment to hiring appropriate talent to replace Vanessa Phillips, who retired in 2022, for this consistent performance.

Operational innovation and change

Our adherence to strong corporate governance practices remains unwavering. The Board continued to oversee effective risk management strategies, ensuring the longterm sustainability of the company.

In 2023, Strauss & Co welcomed Khetiwe McClain and Jo-Ann Strauss, two formidable businesspeople with outstanding professional credentials, to our Board. Khetiwe McClain, a mining entrepreneur with an international background in art, was appointed as Client Advisory Executive. Jo-Ann Strauss, a media entrepreneur and international speaker, serves as a Non-Executive Director.

The appointments were prompted by the retirement of Elisabeth Bradley and Conrad Strauss – founding board members since 2009 – as well as Carmen Welz. We took our time to find appropriate individuals to succeed our outgoing Board members. Khetiwe and Jo-Ann are highly appropriate in their individual capacities and will, I believe, bolster our women-led Board and executive management team. Their energy and drive, coupled with their proven competence and internationalism, will be invaluable as we transform and expand our business locally, on the continent, and beyond. I want to personally thank Elisabeth, Carmen and Conrad for their many years of service on the Board. Accomplished businesspeople, they each graciously and with great commitment provided support and leadership that enabled Strauss & Co to thrive. Their tireless inputs contributed to the forming of a solid foundation on which others have been able to build, and will continue to build. Thank you, Elisabeth, Carmen and Conrad.

In 2023, the duty of managing the day-to-day operations of Strauss & Co was reorganised to enhance decision making and operational efficiency.

Strauss & Co’s executive leadership team (Leadco) is now composed of Bina Genovese, Managing Executive, Cape Town, Susie Goodman, Managing Executive, Johannesburg, and myself. We are supported on key operational matters by a Senior Management team (Exco) that includes Hennie Brand: Chief Financial Officer, Wimpie Nortje: Chief Technology Officer, Khetiwe McClain: Client Advisory Executive, Debbie Watson, Financial Manager, and Alastair Meredith, Senior Art Specialist, who provide critical strategic, financial and logistical insights and the ability to execute on collectively developed action plans.

Alastair Meredith was also appointed as Head of the Art Department, a role previously split between Cape Town and Johannesburg. He took charge of a revitalised team. All the foregoing changes enabled us to create clearer responsibilities and effective workflows across our multiple business sites.

An African business with a world focus

Strauss & Co is an African-centred auction house with an international focus. This vision informed our activities throughout 2023. The year commenced with an ambitious marketing initiative that broke new ground for Strauss & Co.

Curatorial Voices was a first of its kind collaboration for us, involving input on consigning artworks from experts with embedded knowledge of their regions in various markets across the African continent. We launched this repeating auction in our new Woodstock premises during the week of the Investec Cape Town Art Fair. Our programme included a one-day symposium, Art Business Conference in Africa, to discuss key issues in today’s art market. The project was a roaring success.

Combined sales from the online and live components of Curatorial Voices totalled R14.6 million / $801 992, with a respectable sell-through rate of 68.24%. Encouragingly, we matched our historical strength in selling modernist art by successfully transacting works by new-to-market contemporary artists. Gerard Sekoto’s devotional scene, Prayer in Church from 1947, sold for R3.4 million / $187 678, the highest price for an individual work in Curatorial Voices. It was followed by a rare 2016 self-portrait by painter Cinga Samson, which sold for R2.2 million / $118 863, a new South African record.

Good corporate citizenship

At Strauss & Co, we believe in supporting our community through sponsorships, exhibitions, talks and outreach programmes to develop and deepen interest in fine art and collectables. We supported various initiatives throughout the year, including sponsorship of the 2023 editions of Hermanus FynArts, Toyota SU Woordfees, SAFIM, August Art Month at Welgemeend and the Cassirer Welz Award. We also supported several art publications and made our services and resources available pro bono to bolster important art institutions such as the Norval Foundation, Irma Stern Museum, Art Angels and the Nel Erasmus Trust, amongst others.

In addition to regular presentations at our offices through our new monthly Art Club initiative, we also contributed to the education programmes at the inaugural Art Business Conference in Africa (Cape Town) and RMB Latitudes Art Fair (Johannesburg). Alastair Meredith gave a special presentation on the works of Sydney Kumalo and Ezrom Legae at 1-54 Contemporary Art Fair (London).

In June, we launched The Sculptures of Sydney Kumalo and Ezrom Legae – A Catalogue Raisonné at our Johannesburg gallery. Authored by Gavin Watkins and Charles Skinner, the launch coincided with an exhibition of 92 works by Sydney Kumalo and Ezrom Legae, curated by Wilhelm van Rensburg, Head Curator, Strauss & Co. The exhibition featured a vibrant programme of events honouring the publication of this momentous book, which was sponsored and published by Strauss & Co, a milestone for us as a company.

In August, Strauss & Co once again threw their weight behind August Art Month at Welgemeend. The extensive social, educational and hospitality programme for the 2023 edition was anchored by an exhibition, Cape Moments / Kaapse Oomblikke. For the tenth edition of this popular winter event in Cape Town we thought it would be rewarding to look specifically at the many and diverse portrayals of life and the landscape of the Cape informed by the Kilbourn family’s 21 years of living in the city.

The future is already here

Looking ahead to 2024, the social and economic environment presents unique challenges and opportunities. Elections, interest rates, electricity scarcity and geo-political conflicts will continue to dominate the headlines. This downside is countered by resilience in the private sector and a sustained appetite for collectables. The quality of works generated by the creative economy, currently and in the past 140 years and more, will continue to underpin our performance. We therefore remain cautiously optimistic and are committed to leveraging our strengths, adapting to market dynamics and continuing to deliver value to our stakeholders.

In conclusion, I extend my gratitude to our dedicated employees, valued clients, supportive Board, shareholders and other stakeholders for their continued trust and collaboration. Together, we have achieved significant milestones in 2023 and maintained Strauss & Co’s position as the leading auction house in Africa.

We are determined to execute on the strategies and action plans that we have put in place to extend our role in the African Art Market in 2024, building on our relentless commitment to excellence at every level of our passionate operation.

We wish our clients the absolute best for 2024 and look forward to welcoming you, in person whenever possible, to our offices in Cape Town and Johannesburg.

Thank you.

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