Sotheyb's 2nd Quarter Earnings

The NY Times takes a quick look at the recently released Sotehby's earnings for the 2nd quarter of 2017. Net income decreased by 14%, but private sales are up 34% (perhaps the result of the Art Agency, Partners). Private clients are up 20% as are the number of artist estates represented as well as artist representation, and the number of buyers making $1 million or above purchases is up 10% and sellers of $1 million objects up 17%. Some interesting and positive signs for some of the recent changes at Sotheby's.

The NY Times reports

Innovation comes at a price.

Because of expenses incurred by various investments in its growth, Sotheby’s has seen its net income decrease by 14 percent to $76.9 million over the last three months, compared with $89 million for the same period a year earlier, this auction house announced in its earnings report on Thursday.

At the same time, there was evidence that some of Sotheby’s changes have begun to pay off; revenues were up 5 percent for the quarter over the same period last year — to $314.9 million from $298.7 million — and 24 percent for the half.

And Sotheby’s consolidated sales — which include artworks sold at auction, from inventory and in private transactions — were up 2 percent for the second quarter and up 4 percent for the first half of 2017.

David Schick, the lead luxury analyst at Consumer Edge Research, who follows Sotheby’s, commended the auction house’s “clearer operational modernization.”

The auction house’s focus on its private sales showed particularly encouraging results — up 34 percent to $333.8 million for the first half of 2017 over the prior year and up 52 percent from the first half of 2016. Moreover, Sotheby’s had more private-sales transactions in the first half of 2017 than it did during that period the preceding four years.

Despite skepticism about its $85 million acquisition of the art advisory business Art Agency, Partners last year, Sotheby’s clients have since increased more than 20 percent. And in its new business of advising artists and artist estates, Sotheby’s said it has signed up 10 new clients.

And amid uncertainty about what a Trump presidency would mean for the art market, American buying was up 26 percent over a year ago for the first half of 2017, displacing Asia as the largest purchasing region by dollar volume (Asia buying grew 3 percent). Continental Europe grew by 18 percent.

Coming off a period in which auction houses struggled to secure top consignments as sellers were cautionary, high-priced lots made a comeback. The segment of artworks priced above $1 million increased 5 percent and the total average hammer price for those lots was up 17 percent. In addition, the number of buyers in that same $1 million-plus group rose 10 percent, with sellers up 13 percent.

Source: They NY Times