Sotheby’s auction and related revenues were down 12% at $105m year on year for the first quarter of 2012.
The company put the decline down largely to
exceptionally strong Impressionist and Contemporary sales in London
in the first quarter of 2011.
Commission revenues for the period have
improved as overall lot values have fallen - the graduated buyer's
premium yields a higher margin per lot as the average lot price
falls and there is a lower incidence of sharing commissions with
vendors under such circumstances.
The focus of the company's efforts, however,
remain in growth markets such as China and the Far East, and also
on developing private treaty sales, the two most fought-over areas
of business at the top of the auction world at the moment.
"Sotheby's current core strategic
initiatives are focused on extending the breadth and depth of its
relationships with major clients, developing a presence in China
and other emerging markets, and enhancing its ability to conduct
private sales," the company's annual report for 2011, just released
to investors, confirms.
Private sale revenues were up $7m (85%) in
the first quarter "primarily due to increased sales of high value
property", said a spokesman.
Increased operating expenses of 5% in growth
markets, including Sotheby's new Hong Kong gallery, contributed to
the increased net loss of $10.7m for the period compared to a net
profit of $2.4m for the first three months of 2011.
"As the excellent results of our May
auctions make abundantly clear, the first quarter results are in no
way reflective of a slowdown in demand for works of art around the
world," said chief executive Bill Ruprecht. "Private sales will
continue to be an area of strategic focus, as will the web and our
presence in high growth global markets where we are already seeing
Private sale commission revenues totalled
$67.8m for Sotheby's in 2011, a 53% increase on 2010. The company
have introduced new private sales initiatives over the past two
years, including private sale exhibitions and, in 2011, they
completed the construction of a dedicated private sale exhibition
gallery, the S|2 Gallery, at their York Avenue headquarters in New
The growing importance of the company's Hong
Kong operation is illustrated in Sotheby's annual report. It states
that auction and related revenues from Hong Kong have almost
trebled their contribution to the company's global totals since
2007, rising from a 6.5% share at $59.5m to an 18.8% share at
$156.4m in 2011.
The report also makes it clear that the company's new Hong Kong
gallery will allow them to increase the number of sales beyond
their April and October series.