NEW YORK—Sotheby’s fourth-quarter and full-year results were released on March 1, with the auction house posting a sharp increase in profit amid the art market’s continued rise. At the same time Sotheby’s announced plans to increase its focus on the high end of the market and to further capitalize on the growth of the global art market by opening offices in Moscow and Beijing, and establishing a greater presence in the Middle East. Meanwhile, the auctioneer noted, it will cease holding sales at its middle-market London outpost, Sotheby’s Olympia, and also will make staff reductions in New York, Amsterdam and Milan.
Sotheby’s lists its fourth-quarter income from continuing operations, a key measure of profitability, as $69.3 million, or $1.08 a share—up $17.7 million, or 34 percent, from $51.7 million, or 90 cents a share, in the fourth quarter of 2005. The house attributed the increase largely to growth in
Sotheby’s called its 2006 revenues of $664.8 million the highest ever—up $151, or nearly 30 percent, from 2005 revenues. The auctioneer noted a 36 percent increase in aggregate auction sales, which rose to $3.75 billion.
“By virtually every measure, 2006 was Sotheby’s best year ever, and 2007 is off to an outstanding start,” commented Bill Ruprecht, Sotheby’s president and CEO. He reported that February sales in London had produced a record $361.7 million, the highest for the season to date.
Noteworthy areas in 2006 included Impressionist and modern art, contemporary art and several emerging market areas such as Russia and China, Ruprecht said.
He cautioned that Sotheby’s decision to cut back in certain markets will reduce its head count by about 5 percent globally and could result in a first-quarter charge this year of up to $2 million to cover the cost of severance for those employees.
As part of its initiative to expand in the Middle East, Sotheby’s also announced in early March that it will sponsor a new competition for contemporary Arab artists. Sotheby’s sponsored an educational program of the first Dubai International Financial Centre Art Fair, from March 8-10. As ARTnewsletter went to press, shares of Sotheby’s were up 29 cents to $36.88.