Released earlier today, the company’s figures for the third quarter of 2016 showed weaker results than the equivalent period last year which registered a $17.9m loss.
Sotheby’s president and chief executive officer Tad Smith said that they had been expecting “seasonally weak results” during the quarter but added there were “small signs that the market might stabilise”. He also pointed to “internal progress” that meant “when the market does stabilise, Sotheby’s will be poised to do very well for shareholders”.
This year’s third-quarter results were skewed by the summer Contemporary art sales in London appearing in the second quarter, whereas they were counted in the third quarter in 2015.
Looking at the results on a reported basis, auction sales fell by 57% for the quarter. However, by removing the $197m generated by the London Contemporary sales, the decline in net auction sales was 8% on a like-for-like basis.
More indicative of the overall market performance is that total auction sales at Sotheby’s have a dropped 26% in the year-to-date (excluding buyer’s premium), primarily due to issues in gaining consignments with vendors being cautious in their approach.
This was particularly notable in the summer – Sotheby’s results noted that, in relation to the London Contemporary Frieze week sales, “the consignment-getting period for the sales was more difficult”.
Other areas that registered weaker results included the jewellery and Chinese works of art at the Hong Kong auction series in October.
At the same time as releasing their results, Sotheby’s announced the appointment of Linus Cheung as a member of their board of directors. He previously spent 10 years with HongKong Telecom, including six years as chief executive, while before that he was at Cathay Pacific for 23 years.
A collector who has bought at various Sotheby’s salesrooms around the world, Tad Smith described his appointment as “an important symbol of the relationships that Sotheby’s is building in China, especially with the help of our largest shareholder, Taikang”.
The overall number of bidders at Sotheby’s was up 33% over the same period in 2016. The overall number of buyers was up 21% respectively.
The percentage of unsold lots in the third quarter of 2016 was 19%, compared to 23% for the same period in 2016
In the third-quarter of 2016, the average performance of lots sold at Sotheby’s against their low estimate was 114%. This compared to 101% during the third quarter.
Sales of art in Hong Kong in 2016 were up 3% so far this year
The amount Sotheby’s paid-out in this quarter in relation to its purchase of the Art Agency Partners. This included earn-out payments to the previous owners of the business they acquired in January 2016.
Sotheby’s cost-cutting scheme led to a 6% reduction in expenditure for the third quarter and a 12% reduction over the half-year period.
The top lot of Sotheby’s Impressionist & Modern Art evening sale in New York on November 14 is Edvard Munch’s Girls on the Bridge from 1902. It is estimated in excess of $50m.
The amount of new bidders coming through online channels represented 44% of all new bidders at Sotheby’s. The company reported 40% of all online buyers were new clients.