Sotheby’s suffers losses and fires employees

NEW YORK. Sotheby’s world-famous auction house suffered a loss of $ 11.2 million (8. 1 million pounds) in the fourth quarter of last year. This was announced at the end of February.

The representative of the trading house, who reported a profit of $ 74 million for the same period a year ago, explained that auction fees - the largest source of income - fell 8% to 284. $ 4 million for the last 3 months of the past of the year. Total revenue decreased from $ 351 million to $ 335 million, which was largely due to a drop in demand for art in Asia.

One of the investors in the auction house, Dan Loeb, demanded that the company return more money to shareholders, which necessitated a significant reduction in the staff of the house. In particular, Alex Rotter, who headed the department of contemporary art for 16 years, announced his retirement. David Norman, vice chairman of Sotheby’s North and South America and co-director of the Impressionism and Contemporary Art department, leaves after 31 years of work. At the same time, the company did not fail to note the merits and achievements of each laid-off employee.

The downsizing reflects the general changes in the company after its acquisition of Art 85 Partners, a private art-consulting firm, for $ 85 million earlier this year. Agency executives, former Christie’s employees Amy Capellaso and Allan Schwartzman, are currently effectively responsible for the work of the new department, which oversees the Impressionists and contemporary art.

Not so long ago, market experts warned: a global decrease in sales - recent auctions in London showed a 45% drop from last year - is exacerbated by a shortage of masterpieces, including due to the fact that private collectors stopped selling art objects. In these conditions, the auction houses Sotheby’s and Christie’s are forced to focus on ultra-booty customers and compete not only among themselves, but also with the largest gallery owners, such as Larry Gagosyan.

While the global art market shrank by 6% between 2014 and 2016, mainly due to falling sales in Asia and the UK, the US market continues to grow. Here, sales grew from $ 2.9 billion to $ 3.4 billion.

Reform efforts at Sotheby’s began a year ago when the Board appointed Ted Smith, executive director of the entertainment franchise at Madison Square Garden, to run the company and elected Domenico De Sole, former executive director of Gucci, as his assistant.

Both appointments show that the auction house is more concerned about building a strong brand in the face of fierce competition in the market.

Despite all the unsatisfactory financial performance of trading in London and last year’s results, Smith said that “he is confident in our future and intends to build a business with a clear aim to increase the value of the auction house for shareholders and customers.”

Anna Sidorova © Gallerix.ru