Sotheby's Narrows Gap With Christie's in First-Half Auctions
Date: 19 Jul 2006 | | Views: 5118
Sotheby's, the world's No. 2 auction house, is catching up with rival Christie's International by winning a lion's share of the most expensive paintings to sell.
Sotheby's first-half art sales totaled $1.96 billion, according to the company's Web site. They were helped by Pablo Picasso's "Dora Maar au Chat,'' which took $95.2 million at a New York auction in May. Christie's estimated total was "in excess of'' $2.09 billion, spokeswoman Catherine Manson said.
"They moved aggressively to regain market share,'' Christie's Chief Executive Officer Edward Dolman said in an interview in London last month.
Christie's, which is owned by the French billionaire Francois Pinault, racked up auction totals of $3.2 billion in 2005, giving it a 19 percent advantage over publicly traded Sotheby's, whose transactions were about $2.7 billion. For 2005's first six months, Christie's had almost $1.7 billion in auction totals, while Sotheby's sales were about $1.3 billion.
Sotheby's and Christie's are by far the world's largest auction houses, with combined sales last year of almost $6 billion, up 20 percent from a year earlier. Both are benefiting from a boom in demand from collectors ranging from the U.S. billionaire Eli Broad to Chinese and Russian tycoons, and a trebling of contemporary art prices in 10 years.
Sometimes one is ahead, and sometimes the other. Sotheby's, whose main salerooms are in New York, was in first place in 2004, when it sold a $104.2 million Picasso, then lost ground to London- based Christie's last year. This year, it narrowed Christie's lead, partly by guaranteeing minimum prices to sellers of art.
At London auctions in June, Sotheby's guaranteed minimum prices for more than 16 impressionist pictures owned by the U.S. collector Marvin Schein, and for 10 contemporary works at its evening sale.
The gamble paid off. Sotheby's pulled ahead of Christie's in the latter's home town, and raised almost 152 million pounds ($277 million), just 6 million pounds short of its high estimate, at a week of impressionist, modern and contemporary sales. Christie's took in about 141.5 million pounds, some 20 million pounds short of its top target.
Sotheby's Chief Executive William Ruprecht has said he regards guarantees as "an opportunity'' to add profit. If a work sells for more than the guaranteed amount, Sotheby's splits the difference with the seller. If it doesn't sell, Sotheby's absorbs the loss.
Privately owned Christie's doesn't report revenue or profit from its auctions, so total transactions are the only means of comparing the companies. Christie's expects to announce its first-half totals this week or next.
Sotheby's expects to announce second-quarter profit on Aug. 8. Analyst George Sutton of Minneapolis-based Craig-Hallum Capital Group LLC raised his earnings estimate to 95 cents a share, from 85 cents previously, after the London sales.
"Key auctions have continued to see results near the high end of pre-sale estimates,'' he said in a June 23 report.
By Linda Sandler, Bloomberg