Sotheby’s figures for the first half of 2014 saw a significant increase in auction totals help them to a 20% rise in operating income compared to the equivalent period last year.
Auction sales were up 24% thanks primarily to expansion at the
top of the art market. Some 487 individual lots made over $1m (with
premium) in the opening six months of this year.
However, while Sotheby's earnings summary gave little mention of
the financial performance of their private sales departments, the
company's latest filing to the US Securities and Exchange
Commission indicated that revenues here had fallen 48%, down from
$561m in the first six months of 2013 to $294m over the current
This was mainly down to a smaller number of big-ticket items
sold privately but it has also been suggested that the very public
battle between activist shareholder Daniel Loeb and the Sotheby's
board may well have deterred some owners from selling works with
The same filing also showed the company has incurred $24.3m in
'special charges' related to Loeb's challenge (primarily advisory
and legal costs). This has seen Sotheby's share price fall by over
20% in the first half of 2014 - a period when the Dow Jones
Industrial Average climbed by over 15%.
The truce which saw Loeb secure a seat on the company's board
has seen Sotheby's begin a restructuring plan that involves "the
reallocation of resources to collecting categories and regions with
the highest potential for growth".
When asked by ATG whether redundancies will take place in other
departments as part of the proposed $13m worth of cuts, the company
sent a statement saying that they have "identified areas for cost
savings as well as growth and additional investment".
It reads: "Some departments will be expanded and new positions
created, while other areas will see modest staff reductions by the
end of the year. Our goal is to build on the strong results we have
been achieving, continue to increase our ability to compete in the
marketplace, and better serve our clients."
Other key figures from Sotheby's results for the six months to
June 30 include:
• Contemporary art auction sales were up 24% and jewellery by
• Sales at Sotheby's Hong Kong and Beijing increased 56%.
• There was a 35% increase in the number of buyers from Mainland
China in Sotheby's auctions globally.
• A quarter of all buyers were first-time clients.
• Total expenses increased 22% due to higher salaries, costs
related to transactions completed in the period, and special
• John James Audubon's elephant-folio The Birds of America sold
in April 2014 for $3.5m (including premium) - the top online
purchase so far in a live auction at Sotheby's.
• After opening the London branch of S|2, Sotheby's private
gallery hosted Banksy: The Unauthorised Retrospective,
which drew 16,000 visitors, making it one of the most visited
commercial gallery shows ever staged in the capital.
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