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Sotheby’s Reports $2.5 Billion in Sales

2020-08-05 12:42:23

Sotheby’s, the international auction house bought in 2019 by the telecommunications magnate Patrick Drahi, reported Monday that it has sold $2.5 billion of art and collectibles so far this year.

The figures include more than $285 million from online-only auctions and $575 million in private sales. “The art and luxury markets have proven to be incredibly resilient, and demand for quality across categories is unabated,” Charles F. Stewart, Sotheby’s chief executive, said in the statement, acknowledging the challenge of selling high-end inventory during the coronavirus pandemic.

As a privately held company — like its rival international auction houses Christie’s, Phillips and Bonhams — Sotheby’s is under no obligation to release sales figures. It did not divulge in its official release how these figures compared to the same seven-month period last year, nor what profit or loss the company made.

According to data independently compiled by Pi-eX, a London-based art market analytics company, Sotheby’s sales from relatively low-value online-only auctions from January through July were up 540 percent this year, but live auctions of $1.6 billion were down 42 percent, resulting in an overall fall of 25 percent in auction sales. Christie’s equivalent online and live sales declined by 53 percent, according to Pi-eX.

“Auction houses release detailed sales information to remind, at times like this, buyers and consignors that the art market is open for business,” said Doug Woodham, a former Christie’s president of the Americas who is now a managing partner of the New York-based company Art Fiduciary Advisors. “It’s impressive how Sotheby’s has been able to scrabble together so many sales. Because they’re owned by a telecoms magnate, they seemed to innovate faster than their competitors.”

The art market, like so much of the global economy, has been profoundly affected by the Covid-19 crisis. Numerous art fairs and auctions have been either canceled or converted to an online-only format. So far this year, Sotheby’s has held more than 180 online auctions, including the single-lot sale in May of a pair of Michael Jordan’s game-worn Nike sneakers, which sold for $560,000, more than three times the pre-sale estimate.

Credit…Pool photo by Ian Langsdon

“Sotheby’s has been the major innovator in applying digital technologies into the auction space,” said Daniel Langer, the chief executive of the luxury strategy consultancy Équité.

In recent years, live evening auctions of high-value Impressionist, modern and contemporary art have been the prime revenue generators for international auction houses. Sotheby’s canceled its marquee May evening sales in New York, which last year grossed $692 million. These were replaced in June by a new high-tech hybrid “multicamera global livestream” auction that took in $363.2 million.

“The growth of online sales is impressive, but the key issue for Sotheby’s as well as the other auction houses is the drop in revenue from live auctions,” said Christine Bourron, the chief executive of Pi-eX. “Online sales on average still bring much lower revenue.”

Mr. Drahi’s BidFair USA acquired Sotheby’s last year in a leveraged buyout for $3.7 billion, borrowing $1.1 billion to finance the acquisition. Before the pandemic reduced turnover from live sales, the 276-year-old auction house had a net loss of $71.2 million last year. Mr. Drahi, who has a reputation for cost-cutting, reassured investors he would reach at least $66 million in savings, Bloomberg News has reported.

“Every major auction house has huge infrastructure costs associated with running their business,” said Mr. Woodham, the former Christie’s executive. “Because so many of these costs are fixed in the short term, when revenue declines, say 30 percent, profits plummet much more.”


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