Struggling Sotheby’s is thrown a $200m lifeline — will it work?

The autumn season is an important time for auction houses in the sales calendar. But for Sotheby’s, this autumn is more important than for most. “The art market is grinding through a rough patch… driven in part by China’s economic slowdown, wars and volatile US elections,” says The Wall Street Journal (WSJ).

To that list can be added the normalisation of interest rates that makes inherently risky assets, such as collectables, less attractive to investors/collectors when you could earn a decent rate of return by simply sticking your money in the bank. As the WSJ points out, the “sales downturn” could not have come at a worse time for “the auction house’s highly leveraged billionaire owner, Patrick Drahi, who is fighting fires amid restructuring in his broader telecom empire, Altice” (Drahi took Sotheby’s private in 2019, delisting it after three decades of being publicly traded).

Executives at Sotheby’s have even had to settle for IOUs instead of their usual incentive-based pay and questioned whether the auction house would be able to continue to pay its staff, a source told the paper. Sotheby’s denies any such discussion took place, but it did lose $115m in the first half of 2024, compared with a $3m gain a year earlier, according to unaudited financial statements, seen by the paper. It marks a swift change in fortunes.

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Until recently, the art market had been in full swing, with Sotheby’s raking in at least $7bn in sales annually. Then in May of this year, Sotheby’s couldn’t even sell a portrait by Francis Bacon – an artist who until recently had been very much in demand – for its lower $30m estimate, as David Sanderson notes in The Times. In 2020, the auction house sold a triptych by the artist for $85m, above its upper estimate. The good times look to be over.

It’s just as well, then, that Sotheby’s has been able to land the estate sale of this season – that of the late US beauty tycoon Sydell Miller. Collectively, the 90-odd works are expected to make around $200m. They are on show in London until 8 October, after which they will continue their world tour via Asia before arriving back in New York in time for Sotheby’s marquee sales week next month. Claude Monet’s waterlily painting Nymphéas (c.1914-1917) leads the auction with a pre-sale estimate of about $60m, according to Melanie Gerlis in the Financial Times. Another highlight is La Statuaire (1925), a portrait of a seated female sculptor by Pablo Picasso, bought by Miller in 1999 for $11.8m. This time around, Sotheby’s is hoping to get $30m for it.

Wassily Kandinsky’s “celebration of the relationship between colour and form”, Weisses Oval (1921), is also appearing in the line-up, valued at up to $20m, as is Henry Moore’s sculpture of a reclining mother and child from 1976 (expected to fetch at least $8m) and works by Yves Klein (Relief Éponge bleu sans titre, 1961, for $8m-$12m) and Henri Matisse (Jeune fille en robe rose (1942, $3m-$5m). Sotheby’s will be hoping the sale signals a recovery in the market.

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