A Further Look into Christie's Increased Buyers Premiums

Forbes has a good post on the recent announced increase in Christie's buyers premiums (click HERE to see the AW post on the increase).  Forbes looks at the increased commission schedule as Christie's being bullish on the future of the art market and luxury goods.

Of course the exceptions are that now the increase will be followed by Sotheby's, Bonhams and Phillips, and then perhaps getting down to the regional houses.

Forbes reports

Whatever the potential impact to its bottom line, it must be confident for the first time since the wobbly years for the art market following the 2008 financial crisis that buyers will swallow the increased commissions and still show up. Sotheby’s, Bonhams and Phillips have not matched the increases yet, but the expectation is that they probably will.

This vote of confidence in the market is significant, because last year, the results from auction houses were rather mixed. Christie’s reported global annual sales of $6.27 billion in 2012, up 10% on 2011, but as a private company, did not release how much of that was profit. Sotheby’s is reporting its full year results for 2012 next week, but its sales results for the first half of last year were down over 16% and net income down 42% compared to the same period a year before.

In case you missed it, the changes to the buyer’s premium at Christie’s for most collectibles are as follows. Where buyers used to pay 25% commission on the first $50,ooo of any purchase made at auction at Christie’s, 20% on the rest of the purchase up to $1 million and 12% on any amount above that, now they will pay 25% commission up to $75,000, 2o% up to $1.5m and 12% on the rest.

Wine buyers, who pay the same percentage of the hammer price whatever the value of the sale, will see their commission go up to 22% in New York and Hong Kong and to 17% in London, Paris and Geneva.

Source: Forbes