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Why London’s auction houses are feeling so flat

7 June 2024

This June has so far not been a balmy month for the two main auction houses, Christie’s and Sotheby’s. The first omen came when Christie’s announced that there would be no June evening sales in Impressionist, 20th-century or contemporary art. It was presented as a new normal, a necessary part of calendar reshaping to allow the company to ‘better serve the needs of our clients, in particular by re-aligning our sales with the key art market convening moments of Frieze week in London and Paris+ Art Basel in Paris [now known as Art Basel Paris]’.

Traditionally, the major London sales in the categories Christie’s classifies as ‘20/21’ (though certain 19th-century big hitters – i.e. Impressionists – make the grade) have taken place at the start of February and the end of June. There was a smaller mid-season sale scheduled for October. When the Frieze art fair launched 21 years ago, Christie’s tried to get involved in  the warm, fuzzy feeling that Frieze was generating across the London art scene with more auctions that skewed more heavily to contemporary works and the small matter of hosting the Vanity Fair party during Frieze week. The Post-War and Contemporary sale (as it was known at Christie’s) in October began taking on works of higher value and the auction houses tried to extract greater revenue from sales at this time of the year.

On the face of it, removing the June sale might seem surprising. The 20/21 sale made £119m in 2021 and £181m in 2022 (for comparison, the combined sale totals of Post-War and Contemporary and Impressionist/Modern sales in 2019 was £81.6m). So it seemed like things were heading in the right direction – until last year, that is, when the same sale raised a sales total of £63.8m.

Sotheby’s, meanwhile, has stuck with its June sale – at least for 2024. But, as if to ensure that Christie’s wasn’t the only house with a cloud over it for the summer, Sotheby’s has been planning to make 50 members of staff redundant in London. Separately, there are rumours whirling around Sotheby’s New Bond Street HQ – specifically, that its fate might mirror that of its Second Avenue home in New York, when the house announced a move to the old Whitney Museum building on the Upper East Side in 2023. There have even been reports that the New Bond Street building’s landlord has been seen in the corridors – never a good sign.

One specialist I spoke to assured me that the idea that this is a London problem ‘was just lazy journalism’. They might have a point. There seem to be various factors at play. Part of Christie’s problem with their June sale is more to do with supply than location. London is still healthily ahead of Paris (at $10.9 billion, the UK market was still more than double that of France, on $4.6 billion, in 2023). The June sales in London used to take some of the overflow consignments from New York’s major May sales. As the art market has flattened, securing that excess has been harder.

Perhaps what we are seeing is a problem of business strategy. The auction houses put nearly all their eggs in the contemporary art basket but even that category poses supply problems. As markets soften, people are less likely to consign. And a reliance on fewer markets makes them more vulnerable to fluctuations in your suppliers’ moods. As the May sales in New York this year showed, there is a market for reasonably priced works that don’t seem to be over-hyped. But this might not drive the growth that auction executives are looking for. Putting on a sale is expensive and savings have to be found somewhere. You can either make them through reducing working costs or staff costs. Sotheby’s – who are having a tougher year than Christie’s overall – has decided to reduce staff.

In a sign that this is not confined to London, Christie’s has joined Sotheby’s in making global redundancies. Christie’s has always kept a very tight control on headcount so the fact that it is – in its own words – reviewing ‘our global resourcing needs’ is not necessarily as ominous as the Sotheby’s announcement for London. Nevertheless, none of it suggests an auction market in rude health. So the news that a customer has this week filed a class action against Christie’s for its recent data breach – in which the ransomware group RansomHub claims it was able to leak personal information belonging to 500,000 private clients – can only add to the sense that auction houses will be relieved to get to the end of 2024.