Sotheby's, the auction house that sold Edvard Munch's "The Scream" for a record-breaking $120 million, reported a $7.6% drop in profits last year, according to Bloomberg News. For a company that netted $71.5 million in a single year in 2011, the decrease in revenue is significant -- enough to cause a shake-up in the way the auction house collects fees.
Sotheby's is reportedly increasing its buyers' fees in response. This comes after a similar announcement from Christies, and represents the first time in five years that the auction houses have raised their premiums.
So what exactly accounts for the drop in profits? William F. Ruprecht, chairman and chief executive officer of the company, stated in a press conference that the decrease was affected in part by the "unprecedented level of single-owner sale events we had in 2011 which we were not so lucky to have in 2012.” The Wall Street Journal echoes this sentiment, reporting that Sotheby's did struggle to win consignments in a competitive auction environment last year, selling only 35 works priced above $10 million (which is still a high figure, we know), compared to Christie's 49 big money-makers.
The WSJ proposed another possible explanation: Asia's slowing economy. Sotheby's sold $593 million worth of Chinese artwork in 2012, which amounted to a 39% drop in that category since 2011. In the early days of 2012, the art market in China was thought to be the world's largest, but estimates are now showing major declines in the country's two major auction houses, as well as profit declines in Sotheby's and Christie's outposts in Hong Kong. So what do you think, readers? Do the declining numbers cause you to raise an eyebrow?
MORE ARTS NEWS
Sergei Polunin Returns To The Royal Ballet: Polunin, the dancer who dramatically walked out on the UK's Royal Ballet, has returned to the English National stage for a performance of "Marguerite and Armand." Here's to hoping Polunin, now based in Russia, will make cameos more often. (The Telegraph)
Space Artifacts Head To Bonhams: A sale of space artifacts, including an object known as the Space Magna Carta, is coming to New York. Get excited. (The Wall Street Journal)
MoMA PS1 Holds Open Call For Ideas On Development Of The Rockaways: Klaus Biesenbach is spearheading efforts to raise awareness of the need for stable infrastructure in the Sandy-ravaged segment of Queens know as the Rockaways. "We New Yorkers, we fall and get up again, and in Manhattan everything is fine again, but the Rockaways are very dire." (Hyperallergic)
Artworks Damaged In Japan's Tsunami Are Restored To Near Original Condition: “Ironically, it is only during disasters like this that people really appreciate the importance of having conservators around.” (Japan Times)
A Song For Every US State: Want to help choose official songs for the 50 states? Here's your chance. (The Guardian)