In a somewhat surprising move, Sotheby’s announced today it will pay $50 million in cash to acquire the art advisory firm Art Agency, Partners and create a new Fine Art Division run by AAP’s Amy Cappellazzo and Allan Schwartzman. The deal could reportedly total $85 million if the performance benchmarks over the next five years.
“AAP’s profitable business helps drive initiatives that are imperative for Sotheby’s growth – improving our leadership position at the high end of the fine art market, bolstering our private sales capability, giving us new growth opportunities in advisory services, and reinforcing the client-first culture in all we do,” said Sotheby’s CEO, Tad Smith, in a statement.
The news comes in the wake of a so-so run of New York sales, where the auction house bet big on the Alfred A. Taubman collection, which it had paid more than $500 million to secure. After the sales ended, Smith announced that he was offering buyouts to Sotheby’s employees.
Cappellazzo, a former chairman in postwar and contemporary at Christie’s, and Schwartzman, an art advisor who has served as a director at Barbara Gladstone Gallery, formed AAP in 2014, Allen Chinn, a former investment banker, joined the firm later that year, and will be coming to Sotheby’s as well, taking on the role of worldwide head of transaction support.
The left-field acquisition seems to underscore the uncertainties about how Sotheby’s, and auction houses in general, should thrive in changing markets. In an interview on Artspace early last year, Cappellazzo was asked about her new employer’s prospects.
“In the old days, these were simply agent-based auction businesses, but the more the auction houses use their own capital the more that changes the type of business they are in,” she said. “Sotheby’s has a very robust lending program, and both houses do more that looks like private equity. But as you look at the overall industry, you have to be very savvy and have a little bit of a crystal ball to imagine where it’s is going.”