Sotheby's to Open a Private Sale Gallery in London

As private treaty sales continue to grow, the major international auction houses are seeking ways to keep up with and take advantage of the growth and collector interest.  Bloomberg is reporting that Sotheby's plans on opening a separate gallery in London (see image) to display works from private sales.

In the past, auction houses have crossed over into the gallery business, but this move by Sotheby's shows the importance of private sales to the auction house and their willingness to invest in the private sales category.

According to Bloomberg, private sales at Sotehby's increased by 12% in 2012 and totaled $906.5 million from total sales of $5.4 billion.

Bloomberg reports

Sotheby’s (BID), the New York-based publicly traded auction house, will be opening a gallery for private sales close to its branch in London.

The company has taken an undisclosed amount of space in a five-story block at 31 George Street, opposite the back entrance of its New Bond Street auction rooms, the company said in an e- mail. A person with knowledge of the matter had told Bloomberg News that it would open a retail space in the U.K. capital.

The 1980s steel and brick building, incorporating a ground floor gallery, will be dedicated to hosting private selling exhibitions, Sotheby’s confirmed today. Billionaires often prefer buying big-ticket items through unpublicized private sales rather than in the glare of competitive public auctions.

“It’s very smart. I would do the same,” said the New York- based dealer Christophe van de Weghe, who trades in re-offered works by modern and contemporary artists -- the so-called ’secondary’ market. “Sotheby’s will have the same clientele for both their auctions and their gallery sales.”

The auction house is opening a selling exhibition of paintings by Jean-Michel Basquiat at its S|2 galleries in New York this week. Sotheby’s (BID) held a near sell-out show of works by Yayoi Kusama in Hong Kong in May 2012.

Growth Market

Discreet transactions are a significant growth market for the world’s two biggest auction houses. Private sales at Sotheby’s increased 11 percent in 2012, accounting for $906.5 million of a $5.4 billion total.

A figure of 631.3 million pounds ($980 million) -- up 26 percent -- was achieved by London-based Christie’s International (CHRS), which took a record $6.2 billion last year.

Christie’s private sales figures included works sold by its wholly-owned subsidiary Haunch of Venison, a dealership with galleries in New York and London specializing in the “primary” market for new pieces by established and emerging contemporary artists. The company was acquired by the auction house in 2007.

Christie’s closed the dealership and stopped representing artists in March. The subsidiary’s premises at Haunch of Venison Yard, near Sotheby’s in Bond Street, has been retained as an exhibition space for the auction house’s private sales team, who will concentrate on secondary-market works.

“The primary market is a lot more difficult,” Van de Weghe said in an interview. “You need different kinds of specialists and there is whole separate group of buyers. You have to start talking to people like museum curators as well as private collectors.”

Source: Bloomberg