Sotheby’s released its 2017 results last week with $5.5 billions of consolidated sales and +12% growth, an extremely positive results, over expectations.
In a lengthy conference call with analysts and investors , Sotheby’s CEO Tad Smith was bullish on the house’s prospected: “We had a very good year in 2017, and are planning to have an even better one in 2018,” he said. Smith, who has led the auction house for three years, was fresh off last night sale of a 1937 Picasso in London for $69 million, which he called “a pleasing indicator for the year ahead.”
However, what really emerged from the report is the uptick growth in Private sales, +28% in 2017, for a 745$ billions total revenue. The largest part were realized out of United Stated, mostly in Asia and Hong Kong 68%, but even higher sales were in London (71%).
These results perfectly reflect the recent strategy of diversifications adopted by Sotheby’s, which now aims to be a “full-art service“company, namely a firm which can offer a full range of services to their clients, while Christie’s still be more focused on a very high-quality selection of masterpieces.
As Sotheby’s CEO Ted Smith stated to Artsy: “Crucially, Sotheby’s strategy is not to be the ‘biggest’ market share player—although many times it turns out that we do have the largest sales—nor to be the ‘cheap’ consignment deal,” he said. “Instead, we aim to be the ‘best choice’ for those clients who care about service excellence and overall financial performance, and then to deliver that performance over and over again.”
The new particular attention to Private Sales segments is also confirmed by the fact that Sotheby’s set up a specific division for it, differently from Christie’s, in addition to some acquisitions in the last period of a series of company offering art-related services. Among those acquisition, the most important one was AAP-Art Agency Partner, the art advisory firm founded by Amy Cappellazzo (ex Christie’s) the advisory firm founded by former Christie’s contemporary department head Amy Cappellazzo and top art advisor Allan Schwartzman, in early 2016. Smith said that AAP’s new artist estate advisory business “has grown more rapidly than we anticipated, now with 13 clients and a number in contract.” (The newly announced collaboration between the estate of Vito Acconci, AAP, and Pace Gallery offers a glimpse at how that arm of the business may evolve.) The advisory has also begun to work with a number of clients “who are building private museums, presenting us with yet another avenue for growth,” Smith said.
David Schrader, Head of North America Private Sales, explained “we’re thinking bigger picture about people’s collections and where we can help them.” An individual with dozens of works might be better off honing and defining their collection, selling off a few paintings, perhaps, to better afford a single masterwork. The works designated for sale could be sold at auction, or privately, Schrader says.Having both the auction business and private sales as options, “helps us as a company think about what is best for the client,” he says. “In some cases, it might be the auction can provide the best value. In some cases, the timing might not make sense and it might be better privately.”
For these aims Sotheby’s is now focusing on organizing exclusive closed-door exhibitions for private sales. For instance in Hong Kong from next March 29th to 3rd April will be held the first “private selling exhibition“ that will presented “blue chip” arts from Modern and Contemporary art as Pablo Picasso, Marc Chagall and Salvador Dalí. Among the works selection a masterpiece by Willem de Kooning from 1977.
These private sales don’t have a theme and aim not to duplicate what’s taking place in the public auction, but, Schrader says, “we have people who want to walk in the building and walk out with something.” The secrecy and the lower risk are the mean reasons for preferring a private sell. Price points are “not really” all that different in private sales, he adds. In November, works at the private selling exhibitions were priced between US$20,000 and US$30 million. “We try and have a little bit of everything,” Schrader says. “Not everyone is an evening-sale or day-sale .”