Lost Treasures

The numbers looked bad enough for Japanese oil giant Idemitsu Kosan. But while watching its net profit plummet by 70 percent in 2001, the company lost much more than money. The struggling Idemitsu was forced to sell off most of its collection of primarily Chinese ceramics, paintings and calligraphy for $116 million. Amassed over the past 70 years by late founder Sazo Idemitsu and his family, the hoard was among the most visible and respected art collections in Japan. Many of the pieces were sold abroad.

In art as well as life, Japan's so-called Gucci recession may finally be starting to bite. Most of the impressionist and post-impressionist paintings snapped up by Japanese in the go-go 1980s at helium-filled prices--including Renoir's "Le Moulin de la Galette," bought in 1990 for a record $78.1 million--have already been sold back to Westerners. But the hundreds of Picassos, van Goghs and Chagalls reclaimed from failing companies or bankrupt entrepreneurs were always treated more like assets than art. "It was as if the Japanese borrowed those masterpieces for a lot of money and had to return them to the West when we couldn't pay the rent," says a Tokyo art dealer. Now, however, the companies being forced to sell off their collections are those, like Idemitsu, that have been collecting Japanese and other Asian antiquities for decades. The treasures being lost are not merely status symbols or financial investments, but a fundamental part of Japan's fiercely defended heritage.

The losses are particularly galling because of how hard Japanese collectors, in many cases, had to fight to procure these art works. Westerners have helped themselves to Japanese art at several points since the late 19th century, most notably during the early Meiji period (1868-1912), when the country opened its doors, and after World War II, when American soldiers carted off masterpieces as war booty. It wasn't until Japan grew into an economic powerhouse in the 1980s that collectors could afford to buy back those centuries-old scrolls, screens, ceramics and calligraphy. Many of them created new museums to house their burgeoning collections.

The process, quite simply, is now being reversed. As companies look to save money and reduce debt, one of the first things to go are their art collections. It's often difficult to pinpoint exactly where these works are ending up; publicity-shy sellers do not announce most transactions or buyers. But a sense of the outflow can be drawn from those works sold at public auction--"the tip of the iceberg," says Yuji Yamashita, an art-history professor at Tokyo's Meiji Gakuin University. One of the first such events was a sale of some 400 popular Ukiyo-e woodblock prints from the Edo period at Christie's New York in October 1998. Featuring well-known scrolls by Katsushika Hokusai, they came from the collection of Azabu Building, which by the mid-1990s had ran up massive debts.

In June 2001, the Manno Art Museum in Osaka, which houses the late shipping entrepreneur Yasuaki Manno's vast collection of Japanese and Chinese antiques, put up 150 items--including old swords, ceramics and calligraphy--for sale at Christie's London. The auction generated nearly $6 million, doubling the presale estimates. Yamashita says that in the last few years, many Japanese and Asian works have found their way to private collectors and museums in the United States.

Japan's continuing economic woes should unfortunately ensure a ready supply of art work for sale. Even Eiji Tanaka, Manno's chief curator, says "it is difficult to consider the [June 2001] sale successful enough because the Japanese economy has sunk into a more serious situation than expected." Since the current recession began in 1990, more than 80 museums across the country have been forced to shut down--a dozen of them in the last year alone. Founded in most cases by wealthy businessmen, these small institutions have suffered greatly from a drop in visitors and increasing competition from other museums, dozens of which were planned during the boom years. Museums inside major department stores like Mitsukoshi, Tobu, Seibu, Odakyu and Isetan have all recently been replaced as retail sales have continued to drop.

In addition to drawing attention from international art buyers, the glut of Japanese art coming up for sale has begun to fuel Japan's domestic auction market. Until now most art works changed hands exclusively between dealers and behind closed doors; public auctions were largely a foreign concept. But after the Tokyo-based Shinwa Art Auction house successfully sold paintings that had belonged to Yamaichi Securities Co., the giant brokerage company that went bust in 1997, "corporations began to come knocking on our door, to our surprise," says Shinwa senior managing director Kenji Nakagawa. Shinwa's sales have grown from about $9.6 million four years ago to about $40 million last year. Christie's, which does not hold sales in Japan, is planning to send experts to Japanese corporations to appraise their art collections. "They have, until now, had no idea what to put down on their balance sheets," says Kazunori Iwase, president of Christie's Japan.

The problem, though, isn't so much that troubled companies have no way to sell their art works in Japan. Instead the number of willing local buyers is dwindling as the economy continues to swoon. Technically, museums with nonprofit status are not allowed to sell their works without government permission. Tokyo keeps a $20 million fund on hand to buy up important art objects and keep them in the country. The public funds, however, are hardly enough to meet demand. According to the Cultural Affairs Agency, its budget would have to be quadrupled in order to buy up all the national treasures that are being offered for sale. To cut its cultural losses, Japan will have to heal its economy as well.