KAWS Investing Guide: Unsustainable Growth?

KAWS is an American artist and designer best known for his graffiti and street art. His work often features reinterpretations of popular cartoon characters, such as Mickey Mouse and the Simpsons. His work is known for its bold colors, graphic shapes, and playful imagery.

One of his most recognizable characters is “Companion”, a cartoon figure with X-ed out eyes, which has been featured in various forms, such as sculptures, toys and clothing.

KAWS companion
KAWS, Along the way (Black), 2019

KAWS is considered a well-established artist in the contemporary art world, and his work has been exhibited in major museums and galleries around the world, such as the Brooklyn Museum, the Modern Art Museum of Fort Worth, and the Yuz Museum in Shanghai.

Here are a few examples of KAWS’ work that have been considered a good investment by the art market:

  1. “Companion (Passing Through)” sculpture: In 2017, a sculpture called “Companion” sold at Sotheby’s for $14.8 million, becoming one of the most expensive pieces of street art ever sold at auction.
  2. “Along the Way” sculpture: In 2018, another sculpture of the “Companion” character sold at Sotheby’s for $9.9 million.
  3. “The KAWS Album” print: In 2020, a limited-edition print of “The KAWS Album” sold at Christie’s for $1.4 million, setting a new record for a print by the artist.
  4. “The KAWS Album” painting: From which the print is derived sold for $14.7 million in 2019, beating estimates of a $1.0 million valuation.
KAWS album
KAWS, The Kaws Album, 2005

Overall, KAWS’ work has been a good investment for some people, but it’s important to remember that it depends on when and how one acquired KAWS’ work. And this is a critical point to consider if you are thinking of investing in his in 2023 and beyond.

While KAWS’ sales statistics appear promising, one has to wonder how long he can sustain the pace of growth he has experienced over the past ten years. According to Artsy, and illustrated below, KAWS’ sculptures over the past 36 months have had an impressive sell-through rate of 95%, meaning that collectors are scooping them up as fast as they can, for prices, on average, 63% above the mid-price estimates by the leading auction houses.

KAWS sales data
KAWS sales data for the last 36 months

I would suggest that the pace at which his work appreciates may start to slow down. This is because, with little innovation or variation in his career, combined with the considerable amount of editions he turns out to the market each year, he might be destroying his artwork’s (already shaky) exclusivity. This may be true for his sculptural figurines (rather than his prints and paintings), which are pumped out in the thousands and still command a premium for their exclusivity, as the data mentioned above shows. I think that the maxim “the bigger they are, the harder they fall” applies might apply here. The prints and paintings, on the other hand, while still posting impressive numbers, have either more scope for growth or less momentum to shed.

Suppose you are interested in buying KAWS artwork as an investment. In that case, it’s recommended to focus on his more unique pieces such as the work in Yieldstreets Art Debt Portfolio I. These types of pieces tend to hold their value better over time.

To be clear, I am not suggesting that KAWS will be a bad investment moving forward, just that the pace of growth that he have thus far experienced might begin to slow down. Anyhow, the market for KAWS will likely be supported by collectors from Asia, which are a pool of collectors growing faster than any other demographic, who appear to have a insatiable appetite for (in my opinion) trite collectable figurines of which KAWS leads the market.

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