Sotheby’s Sales Dropped 10 Percent in the First Half of 2019 Thanks to Brexit Fears and Cautious Collectors

Is the art market in for a downward dip?

Sotheby’s sold $3.1 billion worth of art in the first six months
of 2019, down 10 percent from the equivalent period last year. The
auction house cited uncertainties related to Brexit as one reason
for the drop. The market’s wavering also comes amid the US’s
ongoing trade war with China and a cooling at the top end as
collectors appear less willing to chase after works priced over $50
million.

Private sales for the first half of 2019 totaled $511 million,
down six percent from the first half of 2018, while auction sales
were down 8.7 percent.

Sotheby’s news comes on the heels of a report from Christie’s
that the auction house sold $2.8 billion worth of art at auction in
the first six months of 2019, down 22 percent from last year. (It
did not disclose private sales.)

In a statement, Sotheby’s CEO Tad Smith said he was “very
pleased with our second quarter and first half performance.” He
also noted that Sotheby’s acquisition
by French-Israeli collector
and entrepreneur Patrick Drahi for a cumulative $3.7 billion
was proceeding according to plan (despite two lawsuits attempting to halt the
deal).

Despite the dip in sales, however, the auction house reported
net income of $57 million in the second quarter, roughly equivalent
to its income during the second quarter of last year ($57.3
million). Sotheby’s attributed this outcome to improved auction
commission margins—last year, it had suffered losses after
two high-profile guaranteed works failed to meet expectations,
requiring Sotheby’s to give up a portion of the buyer’s
premium.

The priciest lot sold so far this year is Claude Monet’s
Meules (1890), which fetched $110.7 million in
May and set a new auction high for the artist. The second top
lot was Pablo Picasso’s Femme au Chien (1962), sold for
$54.9 million, also in May.

The auction house added that it has notable consignments in
store for the fall season, including 280 works of art from the
collection of Claude and François-Xavier Lalanne that will be
offered over a two-day session in Paris in October with an overall
estimate of $18 million to $24 million.

For art-market wonks, the release of Sotheby’s earnings report
also marked the end of an era. The 275-year-old auction house will
no longer be required to release such detailed quarterly and annual
earnings—which offered arguably the only remaining open window into
the finances of the notoriously opaque art market—when it goes
private after Drahi’s acquisition. Sotheby’s expects the
acquisition to close by the fourth quarter of this year.

The post Sotheby’s Sales Dropped 10 Percent in the First
Half of 2019 Thanks to Brexit Fears and Cautious Collectors
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