With the end of its summer auction series restructured to replace the marquee auctions in New York and London normally held during the spring, Sotheby’s has released its sales total for the first half of the year. At $2.5 billion, Sotheby’s sales volume for the year to date (January 1–July 31) was down 25 percent from 2019 when the global total was $3.3 billion. Considering the disruption created by global closures of major sales centers to combat the spread of Covid-19, the drop was some less than the catastrophic outlook in March and April of this year before Sotheby’s had created its live auction model now run twice to substantial success.
Over the course of a two-month period, Sotheby’s was able to make $1.2 billion in sales through its New York, Hong Kong, London, Paris, and Geneva locations. Another $575 million in sales came through David Schrader’s private sales division with the remainder coming from auctions held before the global hiatus.
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“The art and luxury markets have proven to be incredibly resilient, and demand for quality across categories is unabated.” said Sotheby’s CEO Charles Stewart in a statement.
Last year, Sotheby’s held a contemporary art evening sale in May that brought in $341.8 million. During the same season in New York, the Impressionist evening sale made $350 million. By contrast, this year’s first live global auction made a combined total of $363 million. That is a drop of $328 million for the live sale of 2020 from the two New York evening auctions of 2019. Or, to put it another way, that’s effectively losing one of the year’s marquee sales to the pandemic.
The success of the first live sale emboldened Sotheby’s to put together a second one in late July mixing all formats (Old Masters, modern, and contemporary art.) That sale totaled £149.7 million, which almost makes up for the £98.8 million and £68 million in Impressionist-modern art and contemporary art sold in London’s evening sales in June of 2019.
Beneath the evening sales, where supply was surprisingly less constrained than in the so-called middle market, there was a sharp drop in sales activity more from consignors being unwilling to put work up for sale than for a lack of buyer demand. The day sales also saw competition from the increased number of online sales Sotheby’s ran as a strategy to counter the cessation of gallery sales and art fairs. So work normally reserved for the May and June day sales was spread out across the online calendar.
As a result of all those additional online sales, volume increase by 540 percent in the first seven months of 2020 (compared to the same period in 2019). More than 180 online sales brought a total in excess of $285 million. For the first time, online sales accounts for a double-digit percentage of total sales. A crucial question about the future of Sotheby’s is whether those online sales can continue to grow once, or if, auction volumes return to previous levels.
“Our team successfully took the circumstances of the past several months and turned them into opportunities, which advanced numerous initiatives that will likely change our business forever,” said Stewart, citing reformatted sales and buy-now initiatives as crucial points in the strategy to “maximize flexibility” for the houses’s global client base. Among the key buy-now initiatives cited was the landmark introduction of Sotheby’s Gallery Network, announced in June, which brought two dozen blue-chip vendors to the houses’ platform with works available for immediate purchase. E-commerce retail also reached a new benchmark, with Sotheby’s Home section seeing a 35% increase in sales and a 48 percent in transaction volume from the 2019 equivalent period.
Across live and digital sales, the average lot value was over $20,000, more than double the average in 2019. “Although driven by necessity, it’s clear that our clients’ interest and confidence in technology has fundamentally changed,” said Stewart. Key moments drove up the threshold for single-lot performances in the online sector as well, with a 1951 Giorgio Morandi still life realizing $1.6 million in an Impressionist online day sale and a Cartier bracelet making $1.3 million in a jewels online sale in April, moving up online sale records for single items over the seven-figure price point.
Despite the challenges faced in maintaining targets for the live auctions, private sales remained strong. In total, private sales for the period remained level (a 1.5 percent decrease year to year), to total $575 million in 2020, compared to the 2020 total of $583.7 million achieved during the same period the previous year. Works by Andy Warhol, Yoshitomo Nara, Eddie Martinez, Sam Francis, and Ed Ruscha saw the highest demand.
As the virtual marketplace expands, the influx of new buyers is a key area of focus for the firm. According to Sotheby’s, the house saw 30 percent of total bidders, and buyers in this period were new to Sotheby’s, with over 30 percent those clients also being millennial (under the age of 40). Stewart’s efforts to push Sotheby’s toward online sales in order to open buying activity proved crucial in the core market, which is the large base of clients who have transactional potential (confirmed wealth, collecting interest, etc.) but who are not ranked among top collectors (that is, those who would transact at an evening sale level).
Each year, new benchmarks in the Asian art market have driven up totals consistently. In the first seven months of the 2020, sales in Asia totaled nearly $450 million. Sotheby’s Hong Kong series held in July concurrently with the modern and contemporary auctions exceeded $400 million, keeping Sotheby’s as the market leader in Asia for the fifth year. “The power of Asia, combined with the sophistication of established collectors and the appetite of new clients, was central to our success over the past seven months, and particularly since March” said Stewart, also reporting that 20% of all new bidders and buyers have come from Asia.
The pandemic’s effect on the global economy has yet to fully felt or understood. But with Asia seeming to emerge from the crisis with its wealthy population still buying art and luxury items, there is hope in the art market that the market will not experience another 2009-level recession. According to a report published by London-based data analysis firm, Pi-eX, the total revenue generated by the 2020 New York marquee sales at Sotheby’s held in July came in at $464 million (including American art), just half the revenue generated a year before by the same sales, but more than triple the total figure in 2009 (around $108 million between the two 20th to 21st century art evening sales).