Business
As Art Sales Fall, Christie’s and Sotheby’s Pivot to Luxury
When art works fetch spectacular auction prices, like the record $450.3 million for Leonardo da Vinci’s “Salvator Mundi” in 2017, the world’s focus turns for a moment to the arcane goings-on of the international art trade. But with the market in a downturn for the last two years, there have been few attention-grabbing sales at the world’s two biggest and oldest auction houses, Sotheby’s and Christie’s.
An exception came at November’s marquee auctions of modern and contemporary art in New York, when the world’s media — and social media in particular — were momentarily enthralled by the seeming absurdity of a cryptocurrency investor spending $6.2 million at Sotheby’s for a duct-taped banana. But there is a big difference between $6.2 million and $450.3 million.
Sales at Sotheby’s and Christie’s were down for the second year in a row in 2024, according to preliminary figures released by the companies in December. With both supply and demand for big-ticket art in a slump, the auction houses are making major bets on selling luxury goods and niche experiences to make up the shortfall.
Sotheby’s estimated it would have turned over about $6 billion in auction and private sales by year-end, a decline of 24 percent on 2023. Christie’s announced projected aggregate sales of $5.7 billion, down 6 percent year-on-year. Back in 2022, Sotheby’s and Christie’s posted annual turnover of $8 billion and $8.4 billion.
“The auction houses have major problems,” said Christine Bourron, the chief executive of the London-based company Pi-eX, which analyzes art sale results. “They really need to do some thinking about how they can bring some life into their auction business. People who have an interest in art want to have an experience,” added Bourron, who, like many followers of the auction market, finds both Sotheby’s and Christie’s live and online sales increasingly predictable.
Sotheby’s is owned by the French-Israeli telecoms magnate Patrick Drahi, whose beleaguered Altice group is burdened with $60 billion of debt. Sotheby’s deteriorating performance led the auction house to reach out to Abu Dhabi’s sovereign wealth fund, A.D.Q., for a $1 billion cash-for-equity bailout and to lay off more than 100 employees in December. This followed some costly infrastructure decisions: Sotheby’s $100-million purchase of the Breuer Building in New York’s Madison Avenue, the opening of a new headquarters in Paris and the development of a futuristic exhibition and retail space in Hong Kong.
Sotheby’s website now abounds with opportunities to buy pre-owned luxury items at auction or by “instant purchase,” as if in a store, ranging from real estate, classic cars and dinosaur fossils, to smaller prestige collectibles like designer handbags, jewelry, fine wines and game-worn N.B.A. jerseys.
Josh Pullan, Sotheby’s global head of luxury, said sales of such goods draw in wealthy clients who may, in time, start to buy high-end art. “Luxury categories are for us a vital gateway for new, often younger, collectors,” he added.
Last year, luxury generated about 33 percent of sales at Sotheby’s, compared with 16 percent at Christie’s, according to the companies’ communications teams. But the category attracted more buyers than art did.
Guillaume Cerutti, the chief executive of Christie’s, spoke to reporters last month during an end-of-year media call. “Luxury has an advantage, because of the model and the price points,” he said. “Luxury and art will merge with each other,” he added, hinting at future synergies of presentation and categorization.
Christie’s is owned by the luxury goods billionaire François-Henri Pinault, whose Kering conglomerate has also been hit by flagging sales. After introducing handbag auctions back in 2014, Christie’s is now having to catch up with Sotheby’s offering of luxury items and trophy collectibles, like dinosaur skeletons. In September, Christie’s announced that it had reached an agreement to acquire the California-based classic car auctioneers Gooding & Co., setting up a rivalry with Sotheby’s car business, RM Sotheby’s, which last year turned over $887 million in classic auto sales.
“The luxury resale market presents a compelling opportunity for auction houses,” said Daniel Langer, a professor of luxury strategy at Pepperdine University in Malibu, Calif. “Storytelling is a critical success factor in the luxury industry. Auction houses excel in this area — take the recent banana auction as an example,” he added. Sotheby’s marketing, like that of a luxury brand, had skilfully woven a narrative around the sensation that the banana sculpture, by the Italian artist Maurizio Cattelan, created when first exhibited at the Art Basel Miami Beach fair in 2019.
However, this opportunity comes with “significant challenges,” according to Langer. He pointed out that unlike luxury brands, auction houses don’t produce and price all of their own inventory; profit margins on new luxury items are often much higher than their resold equivalents; and unlike conglomerates such as LVMH and Kering, auction houses can’t scale their transactions through a network of retail outlets. These disparities between retail and resale “could limit the overall financial impact of luxury for auction houses,” he said.
Changing spending patterns among the wealthy could also affect demand.
Global sales of luxury flatlined in 2024 for the first time since 2008 (excluding 2020, during the coronavirus pandemic), according to a recent report by the management consultants Bain & Co. The report’s authors said consumers were prioritizing “experiences over products” in these uncertain times and that the luxury goods market, rather like the art market, is suffering from buyer fatigue.
“The super-wealthy in their 30s, 40s and 50s are spending their money on luxury experiences,” said Doug Woodham, a former Christie’s executive who now advises on art-related finance. “That’s money that isn’t being spent on a Matisse drawing,” he added.
“With superluxury experiences, the social cache is so much higher,” said Woodham, who pioneered handbag sales at Christie’s in 2014. “For half a million dollars I can have my 10 best friends on a lavish yacht. They will remember that more than sitting in my house with a Rothko on the wall.”
The global luxury yacht charter market grew to an all-time high of $16.3 billion in 2024, a 6 percent increase on the previous year, according to the Business Research Company. It said that growth has been driven by the popularity of “exclusive and exotic travel destinations” and the “ongoing trend towards experiential luxury.”
In September, Sotheby’s collaborated with the Marriott International hotel chain and the fashion house Alexander McQueen to offer a sealed bid auction, in which bidders can’t see the rival offers. The winner got a two-night stay one of the group’s 5-star London sites as part of an experience that the Sotheby’s website said would “transport guests to where a teenaged McQueen first learned the art of tailoring.” Also included were a five-course fine-dining meal for two, a bespoke tour of London with a private visit to the Victoria & Albert Museum and a personalized photo session with Ann Ray, a longtime McQueen collaborator. Classifying the auction as a private sale, Sotheby’s declined to reveal how much the winning bidder paid for this unique luxury experience, but the presale estimate was $12,000 to $18,000.
Could selling memories, instead of art, be the future of the auction business?
China’s exports and imports each set monthly records in April, further cementing the country as the world’s leading trading nation as Beijing prepares to welcome President Trump for a summit next week with Xi Jinping, China’s leader.
China also ran a trade surplus — the excess of exports over imports — of $84.8 billion last month, according to data released on Saturday by the General Administration of Customs. However, that surplus did not set a record. The war in Iran and closure of the Strait of Hormuz pushed up the cost of imported oil and natural gas, causing China’s overall imports to increase slightly faster than exports.
The surplus in April keeps China on track for a third year of roughly trillion-dollar trade surpluses. China posted a $1.19 trillion trade surplus last year, easily breaking the world record of $992 billion that it had set the year before.
Mr. Trump is expected to press Mr. Xi to buy more American goods during their scheduled summit, part of his long-running effort to narrow China’s longtime trade surplus with the United States. But two recent court decisions overturning Mr. Trump’s tariffs on imports have eroded some of his leverage.
China’s exports to the United States jumped 11.3 percent last month compared to its shipments in April of last year, when President Trump’s “Liberation Day” tariffs produced a slump in imports from China.
The country’s imports from the United States rose only 9 percent in April this year. As a result, its trade surplus with the United States widened by 13 percent.
China has long used state-run purchasing collectives in big categories like farm goods and commercial aircraft to manage its trade with the United States, ensuring it sells three to five times as much as it buys. Mr. Trump and his advisers have criticized that imbalance.
Semiconductor exports doubled last month compared with April of last year. Chinese manufacturers cashed in on the artificial intelligence data center boom even though they cannot yet produce some of the fastest kinds of chips.
Overall exports of electronics and machinery were up 20 percent in April from a year earlier.
China acts in many ways as a shock absorber in global oil markets. Beijing buys more oil for its vast reserves when the price is low, then cuts back purchases when prices are high, as they were last month.
With oil prices spiking upward this spring, the tonnage of China’s oil imports dropped last month to its lowest level since July 2022, when Shanghai’s two-month Covid lockdown reduced demand. The lockdown hurt many of China’s oil-dependent industries.
Because prices rose faster last month than the tonnage declined, China’s overall bill for crude oil imports rose 13 percent from a year earlier. Rising oil prices helped drive China’s overall imports up 25.3 percent in April from a year ago, to a record $274.6 billion. Its exports surged 14.1 percent last month from a year earlier, to a record $359.4 billion.
China has been particularly successful this year in exporting electric cars as well as renewable energy products like wind turbines and solar panels. Exports of electric vehicles were up 52.8 percent last month from a year earlier.
China has been running large, and widening, trade surpluses over the past several years with most of the rest of the world. It has trade deficits with only a handful of countries, including those like Brazil and Australia which have very large commodity exports.
The European Union and many developing countries now find themselves with rapidly growing trade deficits with China. Practically all of them have run their own trade surpluses with the United States to fund their deficits with China, sometimes repackaging goods from China and shipping them on to the United States to do so.
China’s huge trade surpluses are not necessarily a sign of economic strength. They partly reflect very weak spending by Chinese households on imports and domestic goods alike after five years of sliding housing prices wiped out much of the savings of the middle class. This has prompted many families to scrimp on purchases like new cars, leaving Chinese automakers with more cars to export.
“The Chinese economy still demonstrates resilience in trade and industrial supply chains,” said Zhu Tian, an economics professor at the China Europe International Business School in Shanghai, after the release of the trade data.
But weak domestic spending and a leveling off in the trade surplus, he said, “suggest that economic growth will continue to face significant challenges for the rest of the year.”
Walt Disney Co.’s ABC is forcefully resisting Federal Communications Commission efforts to soften the network’s programming, accusing the federal agency of an overreach that violates 1st Amendment freedoms.
Last week, the FCC took the unusual step of calling in the licenses of eight Disney-owned television stations for early review. The move — widely interpreted as an effort to chill the network’s speech — came a day after President Trump demanded that ABC fire late-night host Jimmy Kimmel over a joke about First Lady Melania Trump.
The FCC separately has taken aim at ABC’s daytime discussion show, “The View,” which delves deeply into politics.
The FCC has questioned whether the show, which prominently features Trump critics Whoopi Goldberg and Joy Behar, could continue toclaim an exemption to rules that require broadcasters to provide equal time for opponents of political candidates.
In its response this week to the FCC, Disney’s Houston television station raised the stakes in “The View” dispute, calling the commission’s actions “unprecedented” and “beyond the Commission’s authority.” The ABC station’s petition for a declaratory ruling said “The View,” has long qualified as a “bona fide” news interview program with freedom to conduct interviews of legally qualified political candidates.
“The Commission’s actions threaten to upend decades of settled law and practice and chill critical protected speech, both with respect to The View and more broadly,” the Houston station KTRK-TV said in the filing.
The network’s firm stance sets up a clash with the Trump administration, including the president’s hand-picked FCC Chairman Brendan Carr, who has made no secret of his disdain for Kimmel and other ABC programming. Earlier this year, Carr announced that decades-old exemptions from the so-called “equal time rule,” for some programs, including “The View,” were no longer valid.
In a statement, the FCC said it would “review Disney’s assertion that ‘The View’ is a ‘bona fide news program’ and thus exempt from the political equal time rules,” according to a spokesperson.
“Decades ago, Congress passed a law that generally prohibits broadcast television programs from putting a thumb on the scale in favor of one political candidate over another,” the spokesperson said. “The equal time law encourages more speech and empowers voters to decide the outcome of elections.”
ABC’s strenuous arguments mark a turning point for the Disney-owned outlet.
In December 2024, a month after Trump was elected to a second term, the network quickly settled a lawsuit over statements made by news anchor George Stephanopoulos that Trump found offensive. ABC agreed to pay Trump $15 million to end his legal fight — sparking an outcry among free speech advocates, who accused the network of caving on a case it may have won.
But, over the past year, the network has weathered several storms, including a threat by Carr in September to punish ABC if it didn’t muzzle Kimmel for comments he made in the wake of conservative activist Charlie Kirk’s death. ABC briefly benched Kimmel to allow tensions to cool but, during the week his show was off the air, protesters loudly bashed Disney, demanding the legendary company stand up for free speech.
Thousands of consumers canceled their Disney+ and Hulu subscriptions in protest.
Protesters swarmed Hollywood Boulevard, protesting ABC’s move to bench Jimmy Kimmel in September over comments he made about the shooting of right-wing influencer Charlie Kirk.
(Genaro Molina/Los Angeles Times)
Some conservatives, including Sen. Ted Cruz (R-Texas) and commentator Ben Shapiro also criticized Carr’s handling of 1st Amendment issues.
“The days of the FCC as a paper tiger are numbered,” the FCC’s lone Democrat, Anna M. Gomez, said Friday in a statement. “What the public will remember is who complied in advance and who fought back. I’m glad Disney is choosing courage over capitulation.”
The high-profile dispute presents an early challenge for Disney Chief Executive Josh D’Amaro, who succeeded longtime chief Bob Iger in March.
ABC has asked for the full commission — a three member panel of Carr, Gomez and Commissioner Olivia Trusty, a Republican — to rule on the equal time exemption for “The View.” ABC said that, in 2002, it received a ruling from the FCC that granted the exemption, and the show’s format has not changed. “The View” is produced by ABC News.
“Some may dislike certain — or even most — of the viewpoints expressed on The View or similar shows,” the station said in its filing. “Such dislike, however, cannot justify using regulatory processes to restrict those views.”
ABC described a logistical nightmare of providing equal time for political opponents by pointing to California’s crowded primary field of gubernatorial candidates. “Affording equal time would mean accommodating over 60 legally qualified candidates, regardless of their perceived newsworthiness,” the station wrote.
The network said it makes show bookings based on newsworthiness, not partisan politics. It also noted it has invited politicians from both sides of the aisle to appear on “The View,” but some, including Vice President J.D. Vance, Health Secretary Robert F. Kennedy, Jr., Secretary of State Marco Rubio and entrepreneur Elon Musk, have declined the invitation.
The station also noted that, while the FCC has questioned the exemption for “The View,” the agency hasn’t shown interest in regulating programs on other networks, “including the many voices — conservative and liberal — on broadcast radio.” The FCC also oversees radio station licenses.
“The danger is that the government will simply decide which perspectives to regulate and which to leave undisturbed,” ABC said.
On April 28, Carr called for a review of Disney’s broadcast licenses, including for the Houston station and KABC-TV in Los Angeles, two years before any of them were set to expire. The FCC said the review was part of the agency’s year-old inquiry into Disney’s diversity, equity and inclusion policies and whether they violated federal anti-discrimination rules.
In its Thursday petition, ABC said it had fully complied with the FCC’s request for documents related to its diversity and hiring.
The company has produced more than 11,000 pages of documents to comply with the request, Disney said.
The same week that Disney sent documents to the FCC, Kimmel made a joke on his show about Melania Trump, comparing her glow to that of “an expectant widow.” On April 25, a gunman tried to breach security at the Washington Hilton, where the first couple were on stage for the White House Correspondents’ Assn. Dinner. Shots were fired outside the ballroom.
Three days later, the FCC announced it was requiring early license renewal applications for the Disney-owned stations.
The United States on Friday announced a flurry of new sanctions intended to increase pressure on Iran’s economy, targeting people and companies in China and Hong Kong that have been helping the Iranian military gain access to supplies and war equipment.
The sanctions came ahead of a major summit between President Trump and China’s leader, Xi Jinping, in Beijing next week. China’s support for Iran has become a flashpoint with the Trump administration, which has been trying to compel independent Chinese refineries to stop purchasing Iranian oil.
China is Iran’s biggest buyer of oil, and the Trump administration has said that it is sponsoring terrorism by propping up the Iranian economy.
The new sanctions are aimed at Iran’s military industrial supply chain, and are intended to make it harder for Iran to secure access to the material it needs to build drones and missiles. In addition to China, the sanctions also target people and companies based in Belarus and the United Arab Emirates.
“Under President Trump’s decisive leadership, we will continue to act to keep America safe and target foreign individuals and companies providing Iran’s military with weapons for use against U.S. forces,” Treasury Secretary Scott Bessent said in a statement.
The Trump administration has been looking for ways to squeeze Iran’s economy and pressure the Iranian government to reopen the Strait of Hormuz, a conduit for the flow of global oil. Oil tankers have had sporadic access to the critical waterway since the war started earlier this year, and the United States and Iran have been fighting over who should control it.
U.S. warships that have been trying to transit the strait have been attacked by Iranian forces. The United States on Friday fired on and disabled two Iranian-flagged oil tankers as they tried to reach an Iranian port.
The Treasury Department has also imposed sanctions on the Chinese “teapot” refineries this month. The independent refineries are major purchasers of Iranian oil. But China invoked a domestic policy ordering its companies to disregard the sanctions.
Mr. Bessent said earlier this week that he expected Mr. Trump to urge Mr. Xi to use the country’s leverage over Iran to pressure it to allow oil cargo to travel.
“Let’s see if China — let’s see them step up with some diplomacy and get the Iranians to open the strait,” Mr. Bessent told Fox News on Monday.
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