A decline in net worth of 86% within the course of one year begs question, doesn’t it? That is precisely what has happened at Sotheby’s, whose 52 week stock price has declined from $52.40 a year ago to $7.61 at the end of last month. A decline in profit and a loss of $46.2m in the third quarter, coupled with some poor results in some major sales just completed have all militated to drive the company’s share price down. Some of what occurred was clearly on the horizon, as Sotheby’s has long since stopped providing rather bold guarantees to certain consignors, and had already axed the prospect of any bonus payments to senior staffers. Merry Christmas.
As it is privately held, it is impossible to know for certain how Christie’s has fared. Both houses have, over the past several years, matched each other in offering liberal guarantees to lure the best lots for sale- they have also matched each other in pushing up premium rates for the less desirable lots, and, while ostensibly courting the business of the retail art and antiques buyer, they have both significantly increased buyer’s premiums, as well. What is also known is that, a few weeks ago, Christies abruptly and without notice withdrew the credit terms it has for years offered to its best buyers. Maybe Christie’s needs the cash. Do you think?
While we all focus on the stellar consignments offered by the major houses, not every auction is going to contain the likes of the Rothko and Bacon paintings offered in the last year or so. The houses knew this, too, so their expansion has been in the direction of the retail buyers who were formerly the primary source of custom for the retail art and antiques trade. It is fascinating to take a look at Christie’s redesigned website. It is clearly aimed at the retail buyer, and bears a similarity in function- and complexity- to not only eBay but also to Amazon.com Doubtless you’ve heard, but there is something of an economic slowdown abroad in the world, and these retail buyers are, well, not buying- at least not as much. Christie’s and Sotheby’s could certainly use support from their traditional mainstay- art and antiques dealers- but, cruel irony, the houses having taken most dealers’ business away, what dealers that survive are in a perilous state. Of course, the houses have had the dubious pleasure of then selling the remaining stock of defunct dealers- Christie’s will sell the stock of venerable London dealers Jeremy and Hotspur later this month. It has doubtless occurred to the management of both Christie’s and Sotheby’s that, over the course of the last few years, they have succeeded in nearly sawing through the tree limb upon which they, as well as most of the rest of the art and antiques trade, were seated. As my English colleagues say with the archest of sarcasm, well done you.