Sotheby’s Q1 Sales Rise 23%May 11, 11
Income in the quarter was partially offset by a decline in auction commission margin from 17.2% to 16.4%, attributable to changes in sales mix. In the first quarter, there was an increase in works of art sold in the upper price bands, including a 63% increase in the number of works sold over $1 million, rising from 62 to 101 lots.
“Competitive pressures to win these high value consignments resulted in lower commission margins as Sotheby’s sales approached the peak levels of 2006 – 2008,” the firm said in a release.
A $14.7 million, or 16%, increase in operating expenses has also harmed the bottom line. Some $4.2 million of this increase is attributable to higher dealer cost of sales principally due to $2.6 million in inventory write downs and increased dealer sales revenues.
“This is one of our best first quarters on record,” said Bill Ruprecht, president and CEO of Sotheby’s. “It is all the more impressive given the outstanding first quarter of 2010, which included one work by Giacometti which sold for an unprecedented $104.3 million.
“Sales are up year to date by 31%, continuing the positive momentum into the second quarter of 2011,” continued Ruprecht. “Our Hong Kong sales have been a major contributor, bringing a record total of $447 million, near the high end of the pre-sale estimate and showing the depth and breadth of wealth in that region.” One major contributor the sales in Hong Kong were those of jewelry and diamonds.
The Magnificent Jewels sale in New York last month brought $39.4 million, above the pre-sale high estimate of $35.6 million and the highest total ever for a spring jewelry auction at Sotheby’s New York.
Highlighting the sale were wonderful pieces from a private collection that featured romantic diamonds and fabulous Cartier designs from the firm’s creative peak that brought $7.9 million, more than double the pre-sale high estimate.
In the outlook, the company is reporting strong sales in the second quarter, including the Impressionist and Modern Art sales that brought $209.5 million, above the pre-sale low estimate of $194 million.
April sales in Hong Kong totaled $447 million, a 75% increase from last year’s $256 million and the highest total ever for a sales series in Hong Kong.