Sotheby’s second quarter results suggest shaky art market

Sotheby’s results suggest a shaky market | Sotheby’s second quarter results paint a picture of seasonal inconsistencies, and the difficulty of securing quality works to satisfy a keen but selective market. Promisingly, second quarter net income rose to $89 million (compared to $68 million in the same period in 2015). But half-year net income dropped to $63.1 million (from $72.8m in 2015) due to a $26 million loss in the difficult first quarter of 2016.

Net auction sales were also down about 16 per cent compared to second quarter of 2015, ‘reflecting a comparable decline in the global art market’, according to Sotheby’s President and CEO Tad Smith. As with Christie’s, who released their results last month, Sotheby’s blame this on a shortage of consignments due to a shaky market. This was in part mitigated by a small increase in the auction commission margin, from 15.5 per cent (2015) to 16.4 per cent.

Smith said Sotheby’s ‘would certainly prefer to see a stronger art market’ but are pleased with progress made on ‘strategic initiatives and the beneficial changes to our team and organization’. He added that ‘When the art market improves – and it certainly will – our company is poised to do very well for shareholders. Until then, we continue burnishing Sotheby’s for even more success and being very careful on capital allocation.’

Mike Goss, Sotheby’s recently appointed Chief Financial Officer, said the moving of the London summer Contemporary sales this year from the third to the second quarter boosted earnings. The first six months of this year, said Goss, should give investors ‘a realistic view of the current market, but they will also see our improved auction commission margins, meaningful cost control, and the impact of our ongoing share repurchase program’. Evidently, with shareholders watching, Sotheby’s purse strings will remain tight.

Fabrizio Moretti brings lawsuit against David Zwirner | Old Master dealer Fabrizio Moretti filed a lawsuit in the New York Supreme Court last month against the contemporary art dealer David Zwirner, via his London company Blue Art Limited. It states that in 2014, Moretti agreed to pay $2 million for a unnamed work of art that was ‘one of a series by a world-renowned artist’ represented by Zwirner.

The work, says Moretti, has so far not been delivered and he has decided he no longer wants it. The suit claims that due to Zwirner’s ‘mishandling of other sales of works in the same edition by the Artist, as well as a downturn in the market, the value of works in this series has fallen dramatically in the past year’.

The suit states that although Moretti has asked for his money back, he has not received it and therefore is suing Zwirner for $2 million plus fees, accusing him of breach of contract, fraudulent concealment and inducement. Zwirner, for his part, has filed a motion to dismiss the suit as ‘a case of buyer’s remorse’. The motion will be heard on 30 August and an initial hearing is slated for 15 September.

Lacquer box inlaid with mother of pearl (17th century), from London’s HAN Collection.

Coastal connoisseurship at Art Nocturne Knocke | To the Belgian coast and the summertime institution that is the Art Nocturne Knocke fair (until 15 August). Now in its 41st year, the fair has 50 exhibitors split across two locations, the CC Scharpoord and Hotel La Réserve, in the coastal town of Knokke-Heist. It opens each day from 4–9pm, hence the name, allowing for a full day on the beach before browsing or buying. But these are no seaside souvenirs: galleries from across Europe bring haute époque sculpture, jewellery, period European furniture, design from Art Nouveau to Contemporary, Old Master paintings, and contemporary art. Sales so far this year include a 17th-century lacquer box inlaid with mother of pearl from London’s HAN Collection for €35,000.

Penelope Curtis finds heaven at TEFAF | Penelope Curtis, director of the Calouste Gulbenkian Museum, Lisbon, will curate the third edition of TEFAF Curated at the Maastricht fair in March 2017. Titled Between Heaven and Earth, the section will focus on the reclining or recumbent figure, featuring works on the theme by contemporary artists. TEFAF Curated is intended to bolster the fair’s Modern section, introducing artists new to an event that is far better known for its traditional than its contemporary offering.