Both Christie’s and Sotheby’s revealed that increasing amounts raised from private sales and online auctions during the coronavirus pandemic has helped offset some of the decline in turnover.
Sotheby’s reported a record year for private sales, totalling more than $1.5bn (£1.1bn) so far (further sales are still due), a 50% increase on 2019.
Christie’s recorded £1bn of private sales in 2020, with three sales above $100m.
Sotheby’s also announced it has hired a new head of private sales: Michael Gumener, based in London, who will from January assume the role of senior director, international private sales. He was previously a director of Gagosian Gallery in London and Geneva.
Guillaume Cerutti, chief executive officer at Christie's, said: “We have seen a rare phenomenon of high-end private sales. The uncertainty and the environment has led clients to choose private sale over auctions in some instances”.
During the year Christie's recorded 12 private sales over $25m – it transacted more at this level than through auction (where nine were sold).
Sotheby’s reported turnover for the year at $5bn (£3.6bn) so far for 2020, a 4% rise on 2019 – last year total sales were $4.8bn (£3.5bn).
It also held more than 400 online auctions which it said was an “all-time industry high of more than $570m, (£420m) over three times the volume and over seven times the value for 2019”.
Charles F Stewart, Sotheby’s CEO, said: “In a matter of months, our worldwide team united to implement a sweeping set of transformative changes to our business, many of which will continue long after the pandemic is behind us. Following these innovations, we end the year as market leaders.”
“Vendors more cautious”
In contrast Christie’s reported a fall of 25% in its total sales on the previous year, to £3.4bn ($4.4bn) in 2020.
It was a year of two halves for Christie’s. Guillaume Cerutti, chief executive officer at Christie's, said the second half was very strong and actually outperformed the second half of 2019. This was in part to a recovery with online auctions and more private sales, plus the fact some of its largest auctions were delayed and took place in the final half of the year.
Cerutti said: “The largest part of the drop in sales is live auctions but this was offset somewhat by online sales”.
Its online sales now account for 8-10% of turnover versus just 1-2% in the previous year.
Cerutti said although demand was there, the supply side has been very difficult. This was a “confidence issue and vendors have been more cautious”.
But the predictions for 2021 are good.
Cerutti added: “We believe the demand will remain strong in 2021. The appetite for objects and works of art is very strong across the world. On the supply side we believe it will be a much better year. Delayed decisions to sell are expected and some important estates are coming up in the US. We have a strong pipeline for next year and we are reasonably confident.”
On the redundancies and restructuring at the auction house he said: “We had to undertake significant restructuring. This led to the parting of the ways with many colleagues which was sad and painful”.
But that now the firm has “a strong balance sheet and is in good shape to bounce back in 2021”.
Sotheby’s said the “restrictions on in-person events” led to the auction house “transforming the traditional auction calendar and accelerated the business’s focus on digital innovation”.
It said individual artworks bought or underbid at Sotheby’s auctions, after viewing remotely, exceeded levels of $10m.
Sotheby’s said the average lot value in online sales had more than doubled from under $10,000 to over $20,000 and its global reach online was up 20%, attracting buyers from 107 countries this year.
Cerutti believes the shift to online will remain. The digital innovation was planned but the coronavirus pandemic changed the pace and the time-frame dramatically. He predicts half of auctions will be online-only next year and there will be less live auctions than before in future.
But he said that live auctions “are the essence” of what Christie’s does and they will return. “The future will be omnichannel” he said. Christie’s may repeat its global relay style auction format in 2021 depending on situations around the world and “wants to combine the personal experience with live streamed sales” where necessary.
Sotheby’s also announced expansion in France. It has bought Galerie Bernheim Jeune on rue du Faubourg Saint- Honoré, which will become the company’s new headquarters in Paris in 2023.
The Galerie Bernheim-Jeune, housed on the same site since 1925, played a major role in the development of the 20th century art market. The new premises will enable Sotheby's to develop its exhibition space.
Both auction houses highlighted Asia has a continuing source of growth with Sotheby’s Asian clients accounting for over 30% of Sotheby’s worldwide auction sales.
Sotheby’s said demand for ‘luxury’ items continues to grow. “Passion-based purchases during the pandemic, new sale formats and digital experiences including the launch of the Buy Now platform in the US” helped boost sales.
Despite the big money still in the Contemporary art categories, Cerutti pointed out that many of the “classical” categories have been very resilient. He said the books and maps department had a solid year and a highlight was the sale of an ‘original and complete’ copy of William Shakespeare’s First Folio of plays which set an auction record at Christie's 'Exceptional' sale in New York on October 14 when it sold for $8.4m (£6.46m) or $9.98m (£7.65m) including buyer’s premium.
He added: “The smaller categories are often more resilient and respond better in crisis. We saw this in the 2008 crisis too. The pool of collectors in these more classical areas are more resilient to market trends.”
He said the market remains “more competitive and we have to be more inventive”.
Sotheby’s in numbers 2020
Turnover $5bn (£3.6bn)
Auction total $3.5bn (£2.6bn)
Private sales $1.5bn (£1.1bn)
Online: 400 online auctions taking $570m (£420m)
Christie’s in numbers 2020
Auction total £2.5bn
Private sales £1bn
Online: 205 online auctions taking £243m