COURTESY SOTHEBY’S
Sotheby’s CEO Tad Smith announced this morning in a teleconference that Sotheby’s had lost somewhere between $10 million and $19 million in the fourth quarter of 2015.
Smith, who was joined by Sotheby’s interim CFO Dennis Weibling, attributed the losses in some part to “a lower level of various-owner auction sales, as well as income statement charges related to the Taubman Collection.” He noted that the remainder of the Taubman collection is to go on the block mostly in the Old Master painting sale later this month; it holds a pre-sale low estimate of $24 million, and if that pre-sale low estimate is not reached, losses will increase.
The loss was also due to taxes paid on the repatriation of funds allocated for foreign investment after the board had approved a $200 million increase to its share repurpose authorization, which had previously been at just $125 million. The repatriation of $381 million in foreign earnings will result in a non-cash tax levy of $63 to $68 million.
News of the losses comes after a lackluster fall sales season led to Sotheby’s offering cost-cutting buyouts. Last week, the auction house announced it had paid $50 million upfront, with the potential for an addition $35 million in bonuses, for Art Agency, Partners, an advising firm.
The nature of the news might not have been a surprise, but the timing, to some extent, was. The unusually early earnings teleconference, referred to as a “pre-announcement” and “a change from our normal practice,” noted that the figures could change before the full report in February.