Is Sotheby's Going Bankrupt?, What About Christie's?

Is Sotheby's Going Bankrupt?, What About Christie's?
After a disastrous six months for both firms, with Sotheby's owner in debt up to his neck, whats next for the firm? and Christie's? what about that 24% decline in earnings.
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[@jacobwei757]

I would like to share an example with you to demonstrate how Sotheby’s has been doing their traditional art business in recent years. Lot 152 (a massive sized Luohan carved wood statue) was sold at 1,260 euros in Sotheby’s PF0017 (Arts d’Asie) sale in Paris on December 11th, 2020 as an early 20th century work. However, it had been listed as an early Ming Dynasty work in Sotheby’s N10035 sale (Saturday at Sotheby’s: Asian Art) on March 23rd, 2019 in NYC (Lot 1665, est. $8,000-$12,000) and Sotheby’s N09830 sale (Important Chinese Art) on March 21st, 2018 in NYC (Lot 567, est. $40,000-$60,000). Are they still able to stay focused on authenticating and dating their traditional works of art? I don’t know. I sent them an email to express my concerns but there was no reply

[@michaelbaggott-rk1lh]

As a former Specialist (for both Sotheby’s & Christie’s) i’ve been sad to see the decline of the dedicated departmental sales in favour of mixed “decorative or interior” auctions. The specialist discipline sales underpinned the market for collectors & dealers, it nurtured interest in that particular field & built up relationships which lasted decades. A sad loss.

[@peterhope1986]

Very well done video! Great job Peter. Could not agree with you more. I flew to Hong Kong couple days ago. Visited both Sotheby’s and Christie’s new facilities in HK yesterday. Christie’s just moved to HK’s newest icon building called “ the Handerson”. Its gallery is so hi tech yet very tasteful design. Sotheby’s HK obviously also spent great deal of moneys by setting up their new flagship gallery in an ultra luxury shopping complex called “the Landmark “. surrounding by LV, Hermes…Sotheby’s also sets up three huge stores there to sell so called ‘buy now’ items, watches, hand bags, interior design pieces.. which are what most of us will collect. Your video reflects my concern as well.

[@peterhope1986]

The last sentence should be “which are most of us will not collect “. Sorry for the typos

[@MauriceDyer-t4l]

It must have been a goldmine for buyers when there was no internet or even phone bids.

[@mrpbody44]

It was. I made a lot of money buying things that were poorly identified at the big auction houses back in the 80's in NYC and reselling them a few years later.

[@藏物纳钩]

Online auction platforms are killing the traditional auction houses including Sotheby’s. LiveAuctioneers and Invaluable are making the auction market like trading commodities which is pretty bad for the knowledge based auction houses.

[@mqua4610]

I agree and I add that some online auction houses are selling either fakes or substandard items. I’m a collector of Native American jewelry. I subscribed to LiveAuctioneers hoping to bid on items. However, the Native American jewelry looked mass produced. After looking on comments from Reddit and yelp, I’ve steered clear of LiveAuctioneers because most of the jewelry is not authentic. Unfortunately, most people now don’t care. They just buy things because they are cheap and overbuy cheap stuff.

[@elizabethwilliams7975]

Thank you so much'Well done.

[@margotmcpherson5967]

Why can't I like more than once?!!! Thank you so much for this elucidation which I will send to everyone I know, and for "telling it like it is" so perfectly and exposing what happens when people who know nothing about art, beauty, taste, craftsmanship and quality who are only interested in lining their pockets regardless of the consequence or effect run the show. Ugh is all I can say, and I could say a lot more but it wouldn't be polite!

[@timothysullivan6790]

They’re so bound up with City Of London / oligarchical shady types… Maybe those of us who shop for under six-figure items don’t need to worry if our marketplace will go under. But interesting - if opaque- business story.

[@frederickgolding1913]

Very well said, on every single point. Auction houses as a whole are facing a conundrum as their expenses continue to expand and their need to expand commissions is killing their traditional market. Why is it that homes are full of hugely overpriced glitzy contents, that reflected mammoth profit margins at point of sale, which are then guaranteed to lose 90% of their value in record time, whilst second hand much better made products languish at auctions up and down the country? It is Marketing. Until that issue is addressed the under capitalised second tier auction houses will die a slow death, as at present. Without a robust wider auction house market, Sothebys and Christies will have to turn to whatever the latest trend is, thereby consigning themselves to history.

[@yellowquantum4240]

Sotheby's is done! Drahi turned the historic auction houses into a hedge. They fired a lot of the experts like August Uribe long time expert. They sold out , the new CEO is a banker not an expert. Sotheby's is now a level 2 Ebay.

[@deborahcurtis1385]

Oh dear, I handn't read this before my post. This is a kind of tragedy.

[@samuelburton5576]

I think the financial issues are tied to the World economy especially China. The auction companies are suffering just like luxury car companies and other items. Gucci, LVMH, etc... are suffering right now

[@sirrathersplendid4825]

Exactly. And also Russia. In London auctions back in the 2000s and 2010s, a substantial portion of buyers were Russian.

[@carlhalvorson4106]

Spot on!

[@avardmacgregor746]

They should hire you to straighten things out. I hope that they watch this video. Amateurs with money. Where have all the professionals gone? Are they all gone? It's a sad state of affairs. I have been in the business for 35 years on a very minor level as a PICKER and I am surprised at the lack of knowledge in the business. I am now the expert in my area. How can that be? And I have NO MONEY. Easy to buy stuff and obtain stuff, but difficult to sell. Beware the buyers market. It is a collapse! You, Peter, are the smartest person in the room. Amateurs with money, buying complex businesses that they do not even begin to understand. Good video! Thanks, Peter. See, ... we all can rant, now and then.

[@jeanhawken4482]

Great narration

[@albertpremier5800]

Dear Peter, Thank you for your rant. I couldn't agree with you more. I thought is was me having this opinion . Now I know it wasn't. When I saw the first designer bags offered at Sothey's & Christie's my first thought was: "How vulgar". My second thought: "What is the (art)world coming to?" I always like your rants because the are always to the point. So please keep them coming whenever necessary. Regards, A.

[@paulstremple5296]

So true Peter!

[@BasTHoorn]

Yeah, the drahi and the ceo are terrible. But I'm very much disagreeing with the sentiment that those auction needs to sell only fine art en antiques. I'm new and have to learn a lot, but I learned by reading books about dealers and auction houses that staying in your comfortzone as an auction house and dealer is not the right move either. I'm predict that a lot of auction houses who are staying in their comfortzone will go bust the coming years. And especially as an Auction house you need to try different things and look through trends. The drop was an easy guess. Because this situation with Covid was black swan event. And dont forget that hype is important to sell. I saw a lot of old master, 19th and early 20th art what was selling 25 years ago at sothebys and christies for 100.000 dollar or more what I can find now under 2000 dollar at a local auction house. And dont forget that till 2022 the interest on money was very low. That is also a big part of the bubble. The bubble burst because covid and interest became higher. And now worldwide economy and wars are also going. So there is a lot external factors that makes thing difficult.

[@neddoucet7779]

Any word on Brunks in Ashville? Their site shows no information on damage from Helene. Been buying from them for years, and hope they made it thorough. Thanks.

[@ttzx99]

They did - they sent out a community email last week saying that they survived and their gallery was intact. They are back to business with some delay though.

[@societybooks323]

These company's work ethics, customer service and hard work8ng nature have gone downhill for years. So these are most of many reasons. Still they can improve if they cut down the online arrogance. Very sad news.

[@20thcenturyboy85]

You summed these two companies up very well starting at timestamp 19:00, -THANK YOU!

[@goneysangullies]

Like to hear your comments on Heritage auction

[@robertwasden2691]

"You can't manufacture Antiques" lol try telling that to the Chinese counterfeiters 😂

[@williamwindfield4820]

Sothebys, Christies, Bonhams etc. reject real antiques based on photos. Thanks to this, they provide favorable benefits to local auction houses, which are friendly and even a family atmosphere prevails in local auction houses. 7:15

[@millymaggs9638]

Hear hear Peter, well said!

[@matthewsiegel6307]

Dear Peter, Amen! There are those people who know the price of everything, and the value of nothing; and it appears that Sotheby's and Christie's are proof that you cannot sustain a business model on them! The coup de grace was when they started auctioning ad mass kitsch, such as smelly sneakers sported by celebrities! Boy, how the mighty and haughty have fallen! Yours, Matt Siegel

[@samuelburton5576]

Peter some watches and jewelry are works of art, truly. Many are limited or discontinued altogether. I dont see the issue with Sotheby's or Christies selling these items.

[@PeterCombs]

I agree, SOME are, buit many are just production pieces...

[@mikesmith7107]

You must be oblivious to the current state of the watch market!

[@paullaurencesweeney5255]

The real production numbers are absolutely astounding. Supposedly prestigious brands are pumping their boring timepieces out in truly industrial quantities while playing a "hard to get" marketing game. Of course there are some genuinely special items, but the market has got way ahead of itself and dysfunctional. It really, really needs a hard reset urgently.

[@joereedsmith1531]

NO you think they are, youve been conned into thinking they are, when they are just mass produced outdated machines. What you dont know is that all the famous people you see wearing them, they did not pay for them. They are either gifts or loans and often plain fakes. Pyramid selling at its finest.

[@petecabrina]

The never ending need for profit is the toxicity of our current culture and looking like downfall as well. You would have thought people may have learnt something from 2009 but it appears not.

[@resellexcel]

Your take on Sotheby's was hilarious! Lumborghini 😂

[@coinlessfirefighter293]

Dear Peter, China is producing new ” antiques ” :)))

[@sirrathersplendid4825]

Most of the “antiques” you find in Hong Kong are new and have been for many decades now.

[@I-am-not-a-number]

Is this the end of the post-modernist "art" market? I really hope so.

[@deborahcurtis1385]

Hermès bags and some goods are definitely not mass-produced. But they are made by artisans, and hand-stitched. However I find them overpriced at Sotheby's. They are getting a lot of distress selling from China, so if they can market this into the US and Australia they will make serious money. The issue is that most people who truly have 'arrived' won't be interested in pre-owned anything except antiques and rare items. Not handbags. Also the entire luxury handbag market is undergoing slow collapse. And in Australia there is a big squeeze on as a result of interest rate hikes. It's sad what is happening to this fine institution. Long term staff must be rolling their eyes. Edit: oh I just realised UAE is the epicentre of vulgar displays of wealth. Naturally they'd be interested in this Sotheby's caper.

[@wolfgangfalcore]

They sell handbags because the waiting list on these is so long that the markup is insane. Follow the money.

[@peacerespect98]

Auction house and fashion companies are selling second hand used products.

[@susprime7018]

Interesting, this is my favorite rant so far, keep 'em honest. Blockchain indeed, needs to be ball and chain.😂

[@eligplaysps5]

The antique business is not the same and the younger generation doesn’t want them, especially at those prices.

[@eddieharris6004]

I feel we are entering a golden age for time rich poor pocket collectors, so many traditional fields are now looking absurdly cheap....just purchased fine georgian mahogany chest not too big, great veneers, wonderful patina and condition, same price as a mass produced MDF (medium density fibreboard) piece from a well known retailer.....we live in strange times.

[@larry-f3p]

@@eddieharris6004 Very strange!!!!

[@huzhuiwei]

"They left behind Sotheby's and Christies like those one night stands everyone has in college - it was fun but it wasn't permanent, and just as quickly forgotten"

[@davidhunternyc1]

These auction houses are also selling contemporary paintings, fresh off the wall, without historical criticality, and unproven in the marketplace. So many of these paintings lack quality, both conceptually and technically. The coupling with art galleries has been fruitful but watered down the auction house offerings... but don't knock the Himalayan Crocodile bags!

[@lonia1998]

Absolutely a great take on what many of us have felt for a long time. But will the trendy sheeple listen? Hmmm??? 🤔

[@nathanielalgernon975]

Peter that's a great summary of the current state of the two finest auction houses. I really believe you are right with the quote “When you try to be everything to everyone, you end up being nothing to everybody.” Sotheby's had it's start in 1744 and Christies started in 1766, I hope they can get their acts together and stop being a luxury Ebay.

[@jackkohler1392]

Once youve gone down market its extremely difficult to sell upmarket. Add to that Russians are gone from the market and China not generating the wealth it did... plus everything you mentioned and its a recipe for disaster. And then there's the internet! Spinning off various divisions (e.g. real estate) and going back to their core business would be one option. And as others pointed out, research is expensive and not always profitable. A sad state of affairs.

[@christopherthorpe7840]

nothing to do with greed then ?

[@RichMitch]

Yikes!

[@harrylou3935]

love Peters bold talk 👍

[@adyamski]

The drop in revenue of these main auction houses is probably due to too high selling/buying fees

[@Steve-k6k]

Cheers Peter blaming brilliant

[@manifoldnook1]

Why did they do it? The billion dollar question.

[@brianrichards7006]

I am wondering if Doyle or Freemans/Hindman are in a similar situation? I have no idea, and this is not meant to denigrate either of them. I buy from both.

[@petertrickery5016]

Back in the day, without internet bidding, if you were serious about an antique, you had to take a red-eye flight or drive for 10+ hours just to personally examine and verify it at the auction house. Now, it costs next to nothing-you just sit in front of your computer and click a bid button. There's no way a fake item would ever be bid up to $10,000+, so all my time and effort spent inspecting these items essentially serves others, providing them with a free verification service.

[@joncan2348]

Sofuby & Crusties should have hired Peter as a consultant and avoid this predicament they are now in.

[@IndigoStargazer]

Don’t they also deal in luxury real estate .

[@seattlecommenter]

Private equity doing what it does best: looting!

[@JW-ck9wj]

It’s interesting to hear your views however I think it would be more interesting to hear from the insiders ( staff and executives) of the 2 firms also. Please interview them if you get a chance.

[@williamwindfield4820]

why who really is an expert, me, you, them? anyone can be one, they have some knowledge but not full knowledge. In my opinion, the market dictates the conditions and the buyer, who at his own discretion decides what is worth and what is not, what is an antique and what is not

[@TheTerryE]

They can always sell more Chanel purses!

[@73north]

Well Peter , Wall Street Journal also agrees with you.. Sotheby's is deep in debt .

[@bradbailey5807]

Is scarcity of high-quality art and antiques the problem? Like over-fishing? I don't understand the basic concept of NFTs, blockchains and crypto-currency. Guess I'm too old school. I was a buyer and seller of antiques and "collectibles" for 35 years. Until Ebay, person-to-person sales were all I knew. High-end sales succumbed to the "democracy of the internet." That's when I retired from the business.

[@joereedsmith1531]

All you need to know is that those things, are just speculation, intangible assets never seen or held, the only value in them is when someone pays you more for it. Just a game for people with too much money who like speculation and or tax losses. Just because someone pays an amount for something does not make that think have worth. If I cant pay my $million Tax bill, better buy something and declare a loss on it, quick find me a NFT I can sell at a loss tomorrow, hell can we destroy it? say its lost? I got some drug money, how can I launder it? NFT. How can I spend this worthless Crypto? buy a NFT, sell it, make a loss, black money becomes white. On it goes.

[@johnshoemaker4039]

It could be a factor. I have Asian art catalogs from the 80's and 90's and they had a lot more top level pieces to offer back then. If I had to quantify it I would estimate now they offer around 25% of those rarest pieces they used to get. Most of those went to China, and that is where they must now legally stay.

[@squeakytoyrecords1702]

@Peter Combs Thank you for this insightful video. Do you know of alternative auction houses that rival Christie's and Sotheby's?

[@PeterCombs]

I can name a number of them, that will get the same results and are more appraochable.

[@Portondown]

I blame the marketing people - they go for short term profits and kill the company!

[@tigerphid9677]

I've casually followed the modern/contemporary auctions online for the last 5 years. I noticed that the prices recently seemed very low compared to just a few years ago. I was wondering if this was true and was saying something significant.

[@williamanderson238]

You can blame the problem on local auction platforms, changing tastes (HGTV decor), chasing hot trends (watches, sports items, sneakers, handbags, etc.) that don't last or crazy fees; those are all symptoms - I think the real problem is that the business moved from being an old fashioned operation (where the employees cared and were respected) to one where the business is viewed as a cash flow forming an annuity that needs to ever be expanded. It is standard venture capitalist invovlement. Don't care about the actual business just the cash flow, how to boost the cash flow and how to sell the cashflow. You see this in so many businesses from medicine, to retirement homes, to investment management and to grocery stores. The problem is that the business craters in time from lack of focus, lack of client loyalty and lack of being able to manage. Sothebys kind of went through this with Taubman in the past. The in house finance units likely are hiding some interesting deals (ie. the "Leanardo"), Absolutely enjoy your comments about the monumental ugly houses, crass displays of wealth and assigning value to dubious items.

[@UAGalya]

Poor money management

[@jayare2620]

Its not the money----it's the MONEY

[@danbeaulieu5567]

If anyone hasn’t seen the south park with butters in prison for selling nft’s you must look it up.

[@makingprofits8546]

Every interesting video. Question- Does Sotheby’s own a secondary auction house where they sell lower value merchandise that they don’t want to run through the Sotheby’s auction house?

[@PeterCombs]

No, the use to run what was then called the "Arcade Sales" , they were very popular among dealers, they however ended those sales 20 or so years ago. Today they refer"lesser" items to other auctioneers.

[@mrpbody44]

I think most folks are laundering money via Bitcoin and not art like they did in the past. This has probably lead to the decline of the large auction houses. Customer service at both of the big houses is pretty bad. I had a friend sell some important photography from his collection and he probably would have had better results on ebay. The sale was a disaster.

[@rickytango4057]

milked sellers and buyers for long enough with high premiums!

[@sirrathersplendid4825]

Exactly. Their premiums are obscene.

[@eddieharris6004]

Could you not find an alternative retailer?

[@sirrathersplendid4825]

@@eddieharris6004 - There are others, but they don’t have the same international reach.

[@chriscallaway4027]

Somebody is schnooking them!

[@larry-f3p]

And because that people wants "garbage" whit brand and fake objects because there isn't enough products for all "new richies" in the world! Welcome to the "modern world"!!!!!!!

[@boereboere]

I'm so glad you took the time to voice what many have been thinking. It started with their online presence where it became almost impossible to locate the core info about the core business. Sifting through gunk. I hope they take notice. Thank you😮

[@tonivaripati5951]

[@WondrousThingswithBrianFrench]

Contemporary homes don’t present classic art and antiques well Also affluent people don’t entertain in their homes like centuries ago.

[@sirrathersplendid4825]

We’ve all got too much junk anyway. The clean lines of contemporary homes are just admission that you can think more clearly when there’s less clutter lying around.

[@eddieharris6004]

​@@sirrathersplendid4825With respect couldnt disagree more....but i'm not Mr Ordinairy.

[@sirrathersplendid4825]

@@eddieharris6004 - LOL. You sound like the kind of chap I’d love to have a long chat with at a pub! Love my collections, but they do sometimes get in the way. :-)

[@ab8408]

I think this video shows a distinct disconnection with younger or newer collectors. Take the disdain for game worn jerseys for instance: some of these new collectors may have watched the game that jersey was worn in growing up. Now they have the opportunity to not only own a piece of sports history but also reclaim part of their childhood. Using terms like taste and class betrays an older sentiment where those were held in high esteem. Younger collectors more critically evaluate those terms. Why take something as tasteful or as having class just because someone said so? Personal tastes are prevailing over traditionally held values, and sothebys and Christie’s are trying to match their market demand.

[@PeterCombs]

In my opinion, it's not only about the a piece of history or an event tied to an object, but also about the craftsmanship of the object itself and the history of it'origin, then taking into account any historic event connected to the object. For "older" collectors an object needs to have both aspects. There is nothing inherently special about a Jersey on its own. If the standard is based solely on being worn as a "witness" so to speak of an event you then could argue value for all kinds of things ....

[@Rick1234567S]

Are all the collectibles already collected? Is it possible to buy fine art that does not belong with a paper bag over it's head? Are all rare coins out of circulation at the auction houses due to the great number of those capable of buying them and collecting them? Are antiques passee when smart appliances can do things antiques could never dream of? Are the car collections so large and complete they become museums and never go to auction? Is real estate really a good place to park your money when immigrants and homeless people and people who do not pay rent park there also? So what is left that can sustain a large organization on a daily basis? Have all the valuable artifacts been found and are now in museums? What about fur coats? lol Now c'mon, how desperate is you (modern parlance) Well goat auctions on the silk route are quickly becoming the latest thing given that these people can now afford more goats than ever before. And cows? The price of a calf is um tremendous in Egypt and people are being priced out of the market. "Oh my it's do or die I've got to learn that auction cry Gotta make my mark and be an auctioneer" 25 dollar 30 now 30 dollar 30 dollar 30 dollar 30 dollar give me a hollar 30 dollar Who will bid it at a 35 dollar bid? 35 dollar 35 35 make it 35 and a 35 make it 35 and a 35 Who will bid it at a 35 dollar bid? - The Auctioneer -Leroy Van Dyke 1956