Mr Bailey, who joined Sotheby's in 1979, has held posts as managing director of Sotheby's Chester, managing director of Sotheby's Europe and more recently worked for their business development team. He will still be employed by Sotheby's but only to look after "a few top-end clients".
He will no longer be involved as an auctioneer at Sotheby's.
His new venture, The Auction Room, launched with Lucinda Blythe, who also worked at Sotheby's, will focus on the middle range, a sector of the market from which Sotheby's appears to be moving in favour of high-end works.
"A lot of this mid-range material is going to sell online," predicts Mr Bailey.
Based in West End offices on Dover Street, he has recruited a team of six consultant specialists, most with auction house experience, covering half-a-dozen categories: jewellery, watches, stamps, Chinese ceramics and works of art and Middle Eastern contemporary art.
"We will try to stay in markets where things look good online and start with things that are easy to handle," he told ATG. He also feels the online system will prove a good place for clients to sell the less valuable elements of an important collection.
Sales will begin in early June and, as well as being able to bid online and view via a fully illustrated catalogue list available two weeks before the sale date, clients can attend a public 'bricks and mortar' view prior to the auction.
Fees are described as competitive, with a flat rate vendor's commission and no additional charges for illustration or marketing, or insuring against loss, while buyers pay a staggered rate of 17.5% on the first £20,000 and 12% above £20,000.
Mr Bailey also hopes that his new venture will be able to deliver value by cutting auction deadlines and settlement dates and reducing the process to four or five weeks.
