When works of art fetch spectacular auction prices, such as the record $450.3 million for Leonardo da Vinci.Salvator Market” In 2017, the world’s attention turned for a moment to the surprising development of the international art trade. But with Market in bearishness Over the past two years, two of the world’s largest and oldest auction houses, Sotheby’s and Christie’s, have had some eye-catching sales.
An exception came at November’s marquee auction of modern and contemporary art in New York, when the world’s media — and social media in particular — momentarily seized on the apparent naivety of a cryptocurrency investor who spent $6.2 million at Sotheby’s. had been Banana with duct tape. But there is a big difference between $6.2 million and $450.3 million.
Sales at Sotheby’s and Christie’s were down for the second year in a row in 2024, according to preliminary figures released by the companies in December. With both supply and demand for big-ticket art dwindling, auction houses are betting big on selling luxury goods and exclusive experiences to make up for the shortfall.
Sotheby’s estimates that its auction and private sales will total more than $6 billion by the end of the year, down 24 percent from 2023. In 2022, Sotheby’s and Christie’s had an annual turnover of $8 billion and $8.4 billion, respectively.
Christine Boron, chief executive of the London-based company, said the auction houses had big problems. Pi-exwhich analyzes the results of art sales. “They really need to think about how they can get some life into their auction business. People who are interested in art want to have an experience,” added Boron, who runs the auction market. Like many followers, both live and online sales at Sotheby’s and Christie’s are increasingly predictable.
Sotheby’s is owned by French-Israeli telecoms magnate Patrick Darahi, who has a stake in the troubled Altice Group. 60 billion dollar debt. Sotheby’s deteriorating performance prompted the auction house to reach out to Abu Dhabi’s sovereign wealth fund, ADQ, for a $1 billion cash bailout and equity bailout. More than 100 employees were laid off. In December it followed up with some expensive infrastructure decisions: Sotheby’s $100 million Purchase of the Breuer building On Madison Avenue in New York, an opening New headquarters in Paris and development of a Future exhibition and retail space In Hong Kong
The Sotheby’s website is now rich in opportunities to buy pre-owned luxury items at auction or through “snap buys”, such as in-store, from Real estate, Classic cars and dinosaur fossils, small prestige collectibles like designer handbags, jewelry, fine wine and game-worn NBA jerseys.
Josh Pullen, global head of luxury at Sotheby’s, said sales of such goods could attract affluent clients who, over time, began buying high-end art. “The luxury category is an important gateway for us to new, often younger, collectors,” he added.
Last year, luxury generated about 33 percent of sales at Sotheby’s, compared to 16 percent at Christie’s, according to the companies’ communications teams. But the category attracted more buyers than art.
Christie’s chief executive Guillaume Cerutti spoke to reporters during a year-end media call last month. “Luxury has an advantage because of the models and price points,” he said. “Luxury and art will merge together,” he added, pointing to a future synergy of offerings and assortments.
Christie’s is owned by luxury goods billionaire François-Henri Pinault, whose Kering group has also been affected. Flagging sale. After introductions Handbag auction In 2014, Christie’s is now having to catch up with Sotheby’s offering collections of luxury items and trophies, e.g. Dinosaur skeleton. In September, Christie’s announced it had reached an agreement for the California-based classic car auction. Gooding & Companysetting up a rivalry with Sotheby’s car business, RM Sotheby’s, which changed last year $887 million At Classic Auto Sales.
“The luxury resale market presents a tremendous opportunity for auction houses,” said Daniel Langer, professor of luxury strategy at Pepperdine University in Malibu, California. Storytelling is a key success factor in the luxury industry. Auction houses are the best in this area – take the recent banana auction as an example,” he added. Sotheby’s marketing, like a luxury brand, skillfully weaved a narrative around the feeling that bananas , by Italian artist Maurizio Cattelan, when first exhibited. Art Basel Miami Beach Festival In 2019
However, this opportunity comes with “significant challenges,” according to Langer. He pointed out that unlike luxury brands, auction houses do not produce and price all of their inventory. Profit margins on new luxury items are often much higher than their resale equivalents. And unlike conglomerates like LVMH and Kering, auction houses cannot scale their transactions through a network of retail stores. This disparity between retail and resale can limit the overall financial impact of luxury for auction houses, he said.
Changes in spending patterns among the wealthy may also affect demand.
According to a recent report, global luxury sales are flat-lined in 2024 for the first time since 2008 (excluding 2020, during the coronavirus pandemic). Report Authors of the report from management consultants Bain & Company said consumers are prioritizing “experiences over products” in these uncertain times and that the luxury goods market is being affected, as is the art market. Buyer fatigue.
“Very wealthy people in their 30s, 40s and 50s are spending their money on luxury experiences,” said. Doug Woodhama former Christie’s executive who now advises on art finance. “That’s money that’s not being spent on Matisse drawings,” he added.
“With super-luxury experiences, there’s a lot of social cachet,” said Woodham, who started selling handbags at Christie’s in 2014. “They’re going to be remembered more than sitting in my house with a Rothko on the wall.”
The global luxury yacht charter market will reach an all-time high of $16.3 billion in 2024, up 6 percent from last year. Business Research Company. It said the growth was driven by the popularity of “exclusive and exotic travel destinations” and the “ongoing trend towards experiential luxury”.
In September, Sotheby’s contributed. With Marriott International Hotel Chain and Fashion House Alexander McQueen to offer Sealed Bid Auctionin which bidders cannot see competing offers. The winner receives a two-night stay as part of one of the group’s 5-star London sites Experience “Guests will be transported to where a teenage McQueen first learned the art of tailoring,” said the Sotheby’s website. Plus a five-course gourmet meal for two, a private tour of the Victoria and Albert Museum and a pre-arranged tour of London with a personalized photo session with McQueen’s long-time collaborator, Anne Ray. Classifying the auction as a private sale, Sotheby’s declined to say how much the winning bidder paid for the unique luxury experience, but preliminary estimates ranged from $12,000 to $18,000.
Could selling memories instead of art be the future of the auction business?