Both Christie’s and Sotheby’s have reported disappointing, if unsurprising, sale totals for the first six months of the year.
Christie’s reported a 37.5% ($1.5bn) drop in auction sales—$2.5bn compared with $4bn for the same period the previous year. Meanwhile, Sotheby’s reported a 19% ($600m) drop in sales for the period—$2.5bn compared with $3.1bn for the first half of 2015. Private sales also continued to fall (to $464m at Christie’s and $250m at Sotheby’s).
This will come as little surprise to the trade, and the ongoing auction slowdown is consistent with the latest Tefaf Art Market report, which found that the global market fell 7% in 2015.
It was not all bad news, however. On 8 August Sotheby’s reported second quarter profits of $89m, compared with $67.6m for the same period of 2015. These were helped by events such as the timing of its contemporary art auctions in the summer (which fell in the second quarter this year but the third quarter in 2015), but also began to show the positive impact of its increased commission structure: margins were up at 16.4% in the second quarter (compared with 15.5% in the same period last year). Sotheby’s shares were up on the news, from $34.43 to $36.49 on the day, and stood at $40.53 as we went to press.
During Sotheby’s quarterly conference call, Tad Smith, its chief executive, said that global circumstances had left the art market “with a paradox: on the one hand, collectors are still buying top-quality works of art in well-curated sales. On the other hand, consignors who have the luxury of discretion are showing reluctance to sell their work at this time.”
Meanwhile, in a statement, Christie’s chief executive Patricia Barbizet made no reference to the flagging art market, despite the firm’s dramatic fall in auction sales: “There is continued global demand to acquire works of art and Christie’s again leads the art market,” she said. However, the firm conceded that the fall in the supply of works above £20m was a contributing factor.
The market downturn has gone hand in hand with a spate of resignations at both companies.At the end of July, there were three major departures from Christie’s: Paul Provost, the senior vice-president and director of trusts, estates and appraisals; Nicholas Hall, the international head of Old Master paintings and 19th-century art; and Cathy Elkies, the head of 20th- and 21st-century design.
At Sotheby’s, the fallout this year has been even worse. Staff defections have included Cheyenne Westphal and Alex Rotter, who ran the contemporary department (and who are going to Phillips and Christie’s respectively); Melanie Clore, who ran the Impressionist and Modern department; David Norman, the vice-chairman of Sotheby’s Americas; Anthony Grant, the senior vice president and international senior specialist in contemporary art; and Henry Wyndham, the chairman of Sotheby’s Europe, who was one of the company’s head auctioneers.
To top off an eventful six months for Sotheby’s, Taikang Life Insurance, run by Chen Dongshen and one of China’s biggest life insurance companies, bought a 13.5% stake in July, making it the largest single shareholder, above Third Point’s Dan Loeb, which owns a 11.38% stake in the auction house.
