Andy Warhol Claude Monet Daniel O'Neill Investors Indulge Appetite for Luxury Dealer Holly Solomon’s Papers Headed to Smithsonian Phillips de Pury Makes Its (Small) Mark The Second Sex (at Auction, Anyway) Warhols Send Sotheby’s Soaring

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America’s regional auction houses have used the Internet to reap a middle-market bonanza, but local traditions—and client bases—may be their ace in the hole.

On a chilly Sunday afternoon in April, 75 or so casually attired bidders filled a no-frills salesroom in Chicago, many sipping complimentary coffee from paper cups, for Leslie Hindman Auctioneers’ sale of postwar and contemporary art. Other folks ambled through the adjoining viewing gallery, inspecting the upcoming lots, which were hung salon-style.

Lot 33, a striking figurative painting of a young woman by the 20th-century Irish artist Daniel O’Neill—whose market is red hot in his economically surging homeland—triggered a sudden rush of telephone action, as well as Internet bidding over eBay’s Live Auction platform, driving it to a sizzling $88,800 (est. $20–30,000). Nearby, the dumbfounded consignor, who had recently inherited the painting from relatives in Canada, gasped in disbelief. “I’m not very sophisticated about this, though I’m an artist myself,” she said. “I’m just thrilled with the result.” The O’Neill sold over the telephone to Stephen Donnelly, of the Taylor Gallery, in Belfast, Northern Ireland.

“We had 10 people on the phones,” auctioneer and owner Leslie Hindman said during a break in the $1.2 million afternoon sale. “A few of them were from Ireland. These days, that’s just completely normal. We’re not selling to farmers! It’s a very global market and a different business than it was 10 years ago.” The house, which sells material ranging from books and decorative arts to vintage couture, took in approximately $18 million
in auction sales last year, a jump of approximately 40 percent from 2006. Hindman’s explanation: “There’s a lot of money in the middle market if the business model is followed properly.”

Why is this segment suddenly so lucrative? One reason is that as the whole market pie has grown so have the slices. Global demand for art and collectibles has shot up as economies worldwide have boomed. And the Internet is the user-friendly tool that taps into the spreading wealth. It enables collectors far from the art hubs of London and New York to easily track and bid on works. So-called regional auction houses have become successful and increasingly profitable by going beyond their traditional local client bases to cater to these international buyers.

You won’t find a $20 million Monet or Warhol at Hindman, or at peers like Ivey-Selkirk, in St. Louis; Bonhams & Butterfields, in San Francisco (descended from Butterfield & Butterfield, which Bonhams UK bought from eBay in 2002); or Weschler’s, in Washington, D.C. But the circle of privately held small and midsize firms, some of them still family-owned after generations, annually captures millions of dollars in commissions and premiums on a huge array of collectible and fine art.

The houses’ positions are stronger than ever since auction giant Sotheby’s abandoned the lower end of the market to devote more time and energy to premium items. (Christie’s, while ceding some of its less-elite turf, still does land-office business in its heavily promoted interiors—formerly known as House—sales of cheaper wares in New York, London and Paris, raking in more than $29 million from them since January this year.) And the firms are demonstrating that smaller is often better. “It’s a good time to be in regional auction houses. The bigger houses are concentrating on the top-tier items, while a lot of people are looking around to get attention for the items they’d like to sell,” says Alasdair Nichol, a former head specialist of paintings at Phillips in New York who since 1999 has been the senior vice president and head of the fine paintings department of Freeman’s, in Philadelphia. “We don’t expect someone who’s got something that’s worth $5 million to place it with us immediately, but that may come down the line.”