On 9 May Sotheby’s faced a double whammy of not just a disappointing Impressionist and Modern sale with a sell-through rate of just 66%, but also news of a $25.9m loss for the first quarter of 2016.
On a conference call, Tad Smith, Sotheby’s chief executive, said that first quarters are traditionally difficult for the company, with 80% of annual sales falling in the second and fourth quarters, but admitted that this year’s 35% slide in sales compares poorly to last year’s “exceptionally strong” first quarter profit of $5.2m.
“This [loss] was most acutely felt in the London auctions of Impressionist, Modern and contemporary art in February,” Smith said, “but it was consistent with all other signs in the marketplace for this period.”
Mike Goss, Sotheby’s chief financial officer, also disclosed that an outside investor wanted to raise its stake in the business to up to 10%. Antitrust approval on 17 May from the Federal Trade Commission revealed that investor to be Shanda, a private investment group with its headquarters in Singapore. The group currently owns just under 2% of Sotheby’s stock.