More Bad News From Christie's
After the dismal showing of last fall's auctions, both Christie's and Sotheby's are emerging worse for wear. Last month Sotheby's laid off a number of people from their 1.555 member staff, reducing its salary budget by $7 million. Now, Christie's has announced that it will be making "significant" cuts as well. Christie's employs 2,100 people and also has contracts with many art consultants and freelance workers in 85 offices and 14 showrooms around the world. The company is restructuring now before the big spring auctions. In December, the auction house made major shifts in the wine department, shifting attention to the still-growing Asian market.As we mentioned at the tail end of last year, there were rumors that Christie's might be sold. There hasn't been any further news regarding that but often companies trim their sails to make themselves more attractive to buyers. As Gawker mentions for Christie's much is riding on the sale of the Yves Saint Laurent and Pierre Bergé in Paris on February 23,24 and 25. The collection of over 700 works could bring in between $250 and $400 million.
Part of the problem for both Sotheby's and Christie's last fall was that they had guaranteed high prices for certain works of art. This worked well as a system when the art market was booming but once sales dropped the auction houses had to write checks for art they could not immediately sell on the private market. After November's dismal art auction showings Christie's and Sotheby's were left holding the bag for an estimated $63 million. Christie's auctioned $3.1 billion worth of art during the first six months of 2008 when the market was still strong but did only about half that much business in the second half of the year. Both auction houses have cut their price estimates and will likely only be offering guarantees when the piece in question is extraordinary enough to be a sure sale.
