In an earnings call this morning about its first quarter of 2017, which traditionally lacks any big sales, Sotheby’s announced a net loss of $11.3 million, marking a 49-percent improvement over the same period last year. The uptick was attributed to a 23-percent increase in agency commissions and fees, which went up to $18.4 million, as well as a 41-percent rise in private sales.
During the call, Sotheby’s President and CEO Tad Smith attempted to assure investors that measures of the art market “show signs of strengthening,” mentioning auctions last month in Hong Kong and healthy, if not momentously robust, sales across the board. Of 36 sales in Sotheby’s various areas of business so far this year, 69 percent have exceeded their low estimates, up 57 percent from last year. Smith called that status “a particularly encouraging indicator that supply and demand are in balance.”
He also acknowledged intensifying competition for big-ticket consignments with rival auction house Christie’s. “It is fair to say our competitors have been very aggressive in the market,” Smith said, in reference to a Christie’s staff in the process of rebuilding after the departure of chairman Brett Gorvy late last year.
Smith said that Sotheby’s position is strong heading into the high-profile spring auctions in New York next week, while calling the house’s recently established art advisory business “thriving” alongside other recent efforts to diversify. “Contrary to the opinions of some pundits,” he said of Sotheby’s acquisition of Art Agency, Partners and its expansion into the realm of artist estates, “both of these advisory businesses are delivering where it matters—with our clients and shareholders.”
With the spring sales looming, all eyes are on how Sotheby’s and Christie’s will measure up when the gavels begin to fall—as well as how the market itself will fare. Amy Cappellazzo, Sotheby’s chairman and executive vice president for contemporary art, suggested that signs of life at the uppermost tier as well as among new buyers show “broad galvanization across the market at all levels.” To listeners on the call this morning, she said, “I think the market is definitely strengthening. We’re going to see and feel that next week.”