The move consolidates the 'strategic alliance' that has been in place between the two firms since October 2009 and effectively creates the fourth largest auction group in the United Kingdom.
Bloomsbury, established by three former Sotheby's book specialists in March 1983, have been in the ownership of Stocklight (also the holding company of Bernard Shapero Rare Books, owned by Tommaso Zanzotto and Bernard Shapero) for ten years. During that time the company has morphed from Bloomsbury Book Auctions to simply Bloomsbury Auctions, experimented with a range of collecting categories, moved from Islington to Mayfair and opened salerooms in Rome and New York.
However, beset by financial difficulties, Stocklight have been seeking new owners for the auction business for some time. Rupert Powell, Bloomsbury's managing director, believes that in Dreweatts they have found a complementary fit. "Working together increasingly closely over the past year has demonstrated to us the undoubted advantages that a generalist auctioneer with Dreweatts' excellent reputation can offer the narrower market for our expertise in works on paper," he said.
The relatively small amount of crossover between the two firms is seen as one of the most positive aspects of the relationship, without the duplication in staff and premises that Dreweatts' executive chairman, Stephan Ludwig, a seasoned veteran of merging auction houses, was keen to avoid this time around.
He told ATG that four of the largest consignments Dreweatts-Bloomsbury have handled in recent times were sourced jointly (previously Dreweatts did not have a full-time antiquarian book specialist) and credited the use of the Maddox Street premises in London for origination as the key factor in significantly increased sales of jewellery and watches. Combined, Dreweatts and Bloomsbury posted premium-inclusive sales of £27.7m in 2010.
The Fine Art Auction Group Ltd (trading as Dreweatts) saw turnover in 2010 rise to £17.8m, while Bloomsbury's 2010 London sales increased by around ten per cent over 2009 to a premium-inclusive £9.95m.
The acquisition of the Bloomsbury business by The Fine Art Auction Group (holding company for Dreweatts and their commercial arm BCVA) is being effected through a newly-formed subsidiary which assumes all the current trade of the Bloomsbury Auctions business.
Few significant changes in the management structure of the two businesses are anticipated and all current Bloomsbury staff will be transferred under the acquisition. Mr Powell, Bloomsbury's managing director, joins the Dreweatts management board of the enlarged business as deputy chairman – mirroring the position held at Donnington Priory by Clive Stewart-Lockhart.
However, Bloomsbury Auctions Italia is not part of the deal (but will continue to trade under an active franchise arrangement), while Bloomsbury's ambitious New York operation, which secured some notable consignments following its launch in 2007 but ultimately incurred substantial financial losses, has now closed following its 'mothballing' in 2010.
Much has already been done to tie the two firms together. While the alliance forged in 2009 was not financial, it entailed far more than the sharing of marketing costs and saleroom venues (Bloomsbury's monthly Bibliophile auctions moved from Maddox Street to the former Hamptons saleroom in Godalming).
The past 18 months have seen the two firms adopt the same IT platform, bring their buyer's premiums into line (up to 22 per cent) and promote their sales under two company logos – a branding that will remain unchanged.
Moves were also taken to homogenise the internal accounting, notably in October 2009 when ATG reported Dreweatts had created a separate company governed by independent directors to handle clients' money. At the time Bloomsbury were expected to follow suit "before the end of the year", but in subsequent months the firm was dogged by the failure to pay vendors within the correct time period (the subject of a consumer complaint in The Times newspaper). Bloomsbury conceded financial difficulties, citing the US operation as the primary drain on resources.
Mr Ludwig told ATG that the sale of the Maddox Street operation to The Fine Art Auction Group was facilitated following the satisfaction of all outstanding liabilities, including those of Stocklight's two major creditors. He added that, forthwith, buyers' and sellers' money would always be separate from general business accounts.
By Roland Arkell
