Launched with great fanfare in 2000 during the internet boom, sothebys.com haemorrhaged money from the beginning, and the alliance with eBay, while slowing the losses, did not stop them. At the end of last year, Sotheby’s reported that internet-related operating “expenses” totalled $7.4 million for the nine months ending 30 September, 2002. While a great improvement over the $18.7 million expenses for the previous exercise, these figures were dogging the bottom line at a time when the troubled firm is desperately seeking to enhance its attraction to potential suitors. Sotheby’s president Bill Ruprecht explained that, “Sales have grown substantially less quickly than we hoped; the problem was that we could not achieve the volume we needed,” even though the firm had made a number of high-value sales through the site. He said that the decision would add a “substantial amount” to the bottom line. The cost of sacking some of the 50 employees who work on the site will be in the region of $2-3 million, a one-time restructuring charge that will appear in the first quarter of the 2003 accounts. The news will come as no surprise to those who always believed that high-priced art cannot be sold over the internet, and Mr Ruprecht admitted that “high value people want a relationship with people,” and not with the internet when buying art. The eBay/Sotheby’s alliance will, however, continue, and clients will be able to place bids at live auctions, over the internet.
Sotheby’s to close online art sales site in May
Just a year after Sotheby’s announced a strategic alliance with the giant auction site eBay, it has thrown in the towel and will stop online sales of art and antiques, from May
1 March 2003