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The company, who operate a policy of guaranteeing some transactions to a certain level, balance such deals by taking a larger share of any price above that point. This proves particularly profitable in the booming area of Contemporary art.

In some cases they even pay out the guaranteed sum before the sale, earning interest on the advance payment.

Both methods, risky when the market is unstable, are effective when demand is strong at the top end, as now. And they act as a useful marketing tool in winning high-profile collections.

With a 52 per cent increase in sales and a 77 per cent rise in private sales commissions, this has helped boost overall revenues for the second quarter to $248.3m, up $69.9m, or 39 per cent on the same period last year. Profits have also hit a record for the period, reaching $72.4m, compared to $42.5m for the first quarter of 2005, a rise of $29.9m, or 70 per cent.

Sotheby’s reported higher costs as a result of all this increased activity, including a $4.2m, or 22 per cent, rise in direct costs and a $9.9m boost to incentive bonuses.

The effect has been to set a record for the first half of the year, with revenues 36 per cent up at $344.3m. Profits came to $68.4m, a $35.7m or 109 per cent, increase on the first half of 2005.

The results underline Sotheby’s return to the battle for high-end market share, a policy they had eschewed while they fought their way back via cost-cutting to profitability in the wake of the collusion case. Since 2000, the company say they have cut overall costs by nearly 20 per cent and staff numbers by 30 per cent.

Ditching the lower end of the market has also paid off according to chief executive Bill Ruprecht.

“We made a conscious decision to enhance profitability by concentrating on key high-end and middle-market opportunities and eliminating the costly high volume, lower-end marginal sales. Consequently, we have intentionally halved our lot volume over the last six years. Our excellent financial performance clearly validates this strategy.”

The performance, along with a detailed investor briefing published in May, is likely to increase speculation that Sotheby’s may be seeking a buyer. They abandoned the special voting status of some shares during the recapitalisation of the company on buying out former chairman Alfred Taubman – a move that made the company a more attractive proposition across the wider market.

Christie’s have announced total auction sales of £1.17bn ($2.13bn) for the first six months of 2006, an increase of 38 per cent in sterling (39 per cent in dollars) on last year’s figure of £888m ($1.65bn) for the same period.

The record figure, that includes premium, was underpinned by robust top-end sales of Impressionist and Modern art (up 45 per cent), post-War and Contemporary art (up 37 per cent) and Old Masters (up 53 per cent).

It also represented a boon for the European market that accounted for £596m ($1.08bn) of total sales, up a massive 50 per cent on the previous year.

Christie’s (who as a privately owned company are not obliged to issue full financial statistics) say King Street posted January to June sales of £395m ($715m), South Kensington £39m ($70m) and France a further £85m ($153m), helped by the sale of the multi-million Dray collection (see page 3, ATG No 1750). Sales in Asia and Australia totalled £88m ($159m) with sales in the United States the dominant figure at £486m ($880m), up 32 per cent.

By Ivan Macquisten & Roland Arkell


Total revenues: $248.3m
Profit: $72.4m

Total revenues: $178.4m
Profit: $42.5m


Total revenues: $344.3m
Profit: $68.4m

Total revenues: $252.3m
Profit: $32.7m