NEW YORK—On Sept. 28, Sotheby’s announced it would sell its Australian auction operations to First East Auction Holdings, which owns rival Sydney auctioneer Bonhams & Goodman (the Australian branch of Bonhams), for an undisclosed sum. Tim Goodman, the chairman and chief executive officer of First East Auction, said the company will continue to conduct sales under the Sotheby’s name by means of a license. No announcements have been made about the future of current Sotheby’s operations and employees. “We have the most enormous admiration for the brand, the company and the staff” of Sotheby’s, Goodman said.
Immediately following Sotheby’s announcement, British auctioneer Bonhams issued a statement announcing it would divest itself of its minority interest in Bonhams & Goodman and would “launch its own independent operation in Australia, looking to expand its presence in this important market.”
In the statement, Bonhams chairman Robert Brooks said, “I wish Tim Goodman and the team well. We have enjoyed working with them. Later this year we will take a fresh strategic direction and expand our presence” in the Australian market. Goodman said that Far East Auction Holdings’ licence to use the Bonhams brand would be terminated on Dec. 22.
The deals came as a surprise to the country’s art trade, which had finally dismissed lingering rumors of Sotheby’s departure from the market that had been in circulation even before Christie’s withdrew from Australia in 2006 (ANL, 3/28/06). According to Lesley Alway, managing director of Sotheby’s Australia, the auction house was in the process of evaluating its Australian operations as part of a worldwide review when Goodman’s First East Auction Holdings made an offer to acquire them.
Sotheby’s executive vice president Daryl Wickstrom said First East “understands the value and prestige associated with the Sotheby’s brand” and “has achieved an integrated business model that would enable the Sotheby’s brand in Australia to be appropriately positioned at the top of the market.”
For the year to date, Sotheby’s is the leader in Australian sales, with A$14.6million ($10.2million) compared with Bonhams & Goodman’s A$8.3million ($5.8 million). Total sales to date for this year are A$68million ($48million). Last year, the total value of art sold at Australian and New Zealand auctions fell to A$115million ($92million) from A$175million ($122.5million) in 2007.
Paul Sumner, a former managing director of Sotheby’s who is now a director of auction company Mossgreen, Melbourne, told ARTnewsletter that it was “extraordinary that Sotheby’s International would sell its brand in this region and its majority ownership, and in so doing take on the associated risk that this involves.”
When Christie’s withdrew from Australia, company officials cited the size of the country’s auction market—only 1 percent of the world market—and a desire to expand its presence in Asia as the reasons for its departure. The local auction market consists almost entirely of Australian art. Because of huge continuing exports of minerals to China, the Australian economy is one of the few that have not technically gone into a recession in the current global financial crisis.