Sotheby's vs Christie's

The Financial Times has an interesting article on the changes at the top levels of the top two auction houses, Sotheby's and Christie's.  The article looks at the changing at the top for both auction houses, but also notes that Sotheby's CEO Bill Ruprecht plans on staying on until his successor is named, which could be months.

One of the interesting aspects is as a public corporation, Sotheby's has to disclose most financial information, while Christie's as a private organization, does not have to release profitablity.  The transparency of Sotheby's shows a strong foundation, while Christie's is subject to rumors which may indicate less than desirable financial results.

The Financial Times reports

Rapid leadership turnover at the top of the world’s largest auction houses has sent waves through the international art market.

The surprise exit of Christie’s chief executive Steven Murphy last Tuesday came just days after his counterpart at Sotheby’s, Bill Ruprecht, announced he was standing down.

Yet despite the bitterness of the campaign demanding Mr Ruprecht’s resignation, spearheaded by activist investor Daniel Loeb, he remains in his post.

Speaking publicly for the first since announcing he would step down, Mr Ruprecht told the FT that he expects to continue in his role as chairman and chief executive for months as the auctioneer embarks on the hunt for its next leader.

“You read about these contentious board room narratives, but I can assure you that all the conversations that led to this decision were long, sober, thoughtful and in my view, respectful,” said Mr Ruprecht, a veteran of the company who has spent 14 years at its helm.

“I agreed with the board this was the right time for me to step aside and we are now committed to finding a long-term leader for the future — someone who can steer for the next decade at least.”

The board has formed a search committee to oversee the recruitment of the next chief executive and retained Spencer Stuart, an executive search company, which is looking at leaders within the luxury industry.

It will be led by Domenico De Sole, Sotheby’s lead independent director, who insists that Mr Ruprecht’s ongoing leadership is essential for morale as it undergoes a period of transition.

“I have great respect for Bill and it’s important for us to have Bill continue in his capacity as CEO and chairman until a new leader is found,” said Mr De Sole.

“It isn’t just a mark of respect — it’s comforting for both the board and all Sotheby’s staff to have him there in the transition period. And we will have him here until the new CEO comes on board. Frankly, that is our style. I can’t stress how proud I am of how our company and how we are handling this transition — it’s dignified and transparent and beneficial for all. ”

Both men are keen to stress that Sotheby’s, which narrowed its losses to $27.7m in the last quarter, has generated $2bn worth of sales in October and November across a broad swath of categories.

“What makes our business uniquely sustainable is that we are broad-based, we don’t depend upon any one region or category to drive our success. It’s a critical component of our business model. We’ve just hosted the most important African Art, Latin American Art, single owner and Old Master sales. You can’t depend on one single sector,” said Mr Ruprecht.

Christie’s, by contrast, generates the lion’s share of revenues from its postwar and contemporary division. Its New York November sale generated $853m, smashing records to become the biggest auction in history.

French President of the Supervisory Board of Pinault, Primtemps-Redoute Patricia Barbizet poses during the first edition of the "Women's forum for the Economy and Society", 15 October 2005 in Deauville, Western France. The Forum gathers more than 500 leaders from the economic, political, social, academic, scientific and cultural spheres from 13 to 15 October at the International Center of Deauville.

But the returns were widely rumoured to be less than glittering, with about $400m of guarantees placed against the lots, according to people familiar with the situation. It has insisted that both revenues and profits are healthy. But unlike its quoted rival, Christie’s, majority owned by French luxury tycoon François Pinault, is not obliged to disclose its profits.

Despite calling it “mutual and amenable” Mr Murphy’s hasty departure has been uncomfortably public. Replacing him with virtually immediate effect is Patricia Barbizet, pictured, who will continue in her current role as chairman of the London-based auctioneer.

Ms Barbizet, a longtime lieutenant of Mr Pinault, will also remain managing director of Financière Pinault and chief executive of Groupe Artemis, the Pinault family’s investment firm.

She is said to be looking at various options for the auction house, including a possible restructuring.

The men at the helm of Sotheby’s, after launching their own financial restructuring plan in January and a clutch of high-profile sales, including the estate of heiress and socialite Bunny Mellon, claim a turnround is under way.

“The sales figures we hit this month and last month prove Sotheby’s is doing very well. We are a public company and we have an obligation as a public company to deliver and that’s what we are doing,” said Mr De Sole, adding that the business was performing “superbly” and that Sotheby’s had a “remarkable” autumn.

“I can’t give you a playbook of how the next year will play out, but the shared vision of Domenico, myself and the rest of the board is that we are deeply committed to expanding the organisation and giving new markets access and exposure to our business. I really believe in the power of the art market and in our brand, ” echoed Mr Ruprecht.

Source: The Financial Times