By Socratis Santik Oglou,
One of the most important names in the field of the art market and auctions is undoubtedly Sotheby’s. With a long history in sales, from the beginning of the company until today, some of the most important works of art in history have passed from there, and there were some of the most important and highest sales of works ever made. Sotheby’s is considered one of the world’s leading auction houses. It was founded back in 1744 in London, while at the beginning of its history, it handled sales of important manuscripts and library collections. But later on, around the mid-1950s, it took a turn and focused on the sale of artworks, making it now an international reality.
Sotheby’s brief history
Sotheby’s (in full Sotheby’s Holdings, Inc.; Sotheby, Wilkinson and Hodge, from 1864 to 1924; Sotheby and Company, from 1924 to 1983) auction house was founded back in 1744, by Samuel Baker, when he successfully held his first auction on March 11th, 1744. Baker was a publisher with an enterprise vision and started his sales and auctions with books and manuscripts.
Later on, Baker established his firm in York Street, while he took his business a step further, by handling libraries over the years. At the same time, in 1767, Baker went into partnership with George Leigh. Leigh had a natural talent for auctioneer and selling. His talent was so great, his original bit hummer is still exhibited in museums. In 1807, following Baker’s death, the firm was divided between Leigh and one of his nephews, John Sotheby. In 1818, they moved the firm from York Street to 13 Wellington Street. During that time, they extended their role and took it a step further, by auctioning prints, coins, medals, and antiquities. They lead the company for more than 80 years, until 1861 when John Sotheby died. Nevertheless, the company continued to operate under various owners.
Back in 1842, John Wilkinson, who was the firm’s accountant, became a partner in the firm. In 1861, when the last of the Sotheby family member died, Wilkinson became the head of the firm, and 3 years later he promoted Edward Grose-Hodge. These two, later on, rebranded the firm under the name Wilkinson and Hodge, carrying that name up until 1924.
In 1907, following Hodge’s death, his son, Thomas, took over, bringing new “blood” to the firm. The new team led the firm into a huge success in sales. Their first landmark was the sale of Huth library, making over 12 sales between 1911 to 1922, making £300,000 in auctions. During the summer of 1917, the firm headquarters moved again, from Wellington Street to 34-35 New Bond Street in Mayfair. And shortly after that move, they turned Sotheby’s, from the master of the book sales to the medium in top sales in the art world.
After the years, World War I came, which reflected on the firm, too. Many of the working men in the firm had to enlist in the Services. This led the firm to hire women in their place. It is fair to name the first woman to ever join Sotheby’s. Her name was Emily Millicent Sowerby, and she worked as the book’s cataloguer.
During the 19th and early 20th centuries, Sotheby’s focused almost exclusively on selling books, manuscripts, and prints, while only by sparse intervals sold works of art. But after World War I, the business turned its interest towards the sale of works of art mainly of newer movements, like Impressionism, Modern art, and abstract artworks, leading the firm to be considered a dominant auction house quite soon.
An important moment in the firm’s history constitutes the pre-war trainee in the furniture department. Peter C. Wilson, who opened the Impressionist and Modern art department during the 1950s, wooed private and public sales, making him a great chairman during the postwar years. After World War II, the company was owned by Wilson, who established Sotheby’s in New York City. In 1964, Sotheby’s and Parke-Bernet Galleries partnered together. Parke-Bernet Galleries was the top auction house in America at that time. By this partnership, Sotheby’s became the first international auction house to conduct sales in Hong Kong (1973), Russia (1988), India (1992), France (2001), and China (2012). In just a few years in the firm, Wilson increased the sales of Sotheby’s, while he redefined the art auction in the industry.
The first really successful auction of this era was the sale of the Weinberg Collection in 1957, which was attended by Queen Elizabeth II. Following this milestone, just a year after the auction house topped the previous auction, there comes the Goldschmidt Collection, which was consisted of seven impressionist artworks, making the event a world record in the fine art sales industry. This milestone was followed by sales in the late 1950s and 1960s, with avant-garde masterpieces, like Rubens’s ‘Adoration of the Magi’ (1632–34) and Gauguin’s impressionistic artworks, depicting the Tahitian life.
From the 1980s to the 2000s, Sotheby’s had some of the greatest sales ever, hitting astonishing price records in auctions. Some of the most important sales include: Rubens’s ‘Massacre of the Innocents’, consisting of two paintings which were painted in 1610 and 1638 correspondingly (£49.5 million in 2002 in London), Pablo Picasso’s ‘Garçon à la pipe’, painted in 1905 ($104.2 million in 2004 in New York), and Andy Warhol’s ‘Silver Car Crash (Double Disaster)’, painted in 1963 ($108.4 million in 2013). Another really important sale is Rembrandt’s ‘Aristotle with a Bust of Homer’ (1653), which was purchased by New York’s Metropolitan Museum of Art, for $2.3 million.
Moreover, Sotheby’s gained prestige from auctions made by private collections from renowned personalities, like Jacqueline Kennedy Onassis, Greta Garbo, and Gianni Versace. Another highlight in the auction houses history includes Damien Hirst’s “Beautiful Inside My Head Forever” auction event, which was conducted directly by the artist. This event became a landmark for the contemporary art market.
But in 1983, the auction house was bought by A. Alfred Taubman, making the company private again. Taubman led the company to huge growth, while he opened new flagship salerooms in New York City, on 1334 York Avenue. However, the firm went public in 1988, listed on the New York Stock Exchange. Moreover, in 2002, he was led to a plan to determine the prices of his sales by the rival auction house of Christie’s.
In 2019, Sotheby’s announced the agreement for them to be acquired by BidFair USA. BidFair USA is a company owned by the media and telecommunications entrepreneur, Patrick Drahi. Drahi made the firm private again, after 31 years. Shortly after, Charles F. Stewart became CEO of the firm, making him the one to meet all the challenges that the contemporary art market brings.
But how does this art business work?
Sotheby’s operates as a market, in which rare items are offered to the public for sale. Precisely because of the rarity, and therefore the competition that exists for the registration of these rare objects, the market for them is very fluid. The firm is a means for investors and collectors to sell their holdings.
Most of the time, the price of the auctioned objects is really big. That happens because fine art, gemstones, and antiques are worth as much as the buyer is willing to pay to get them. To put it simply, an item is being offered in the auction with a starting price. The one who is willing to bit higher and pay the most money, compared to the other attendees, is the one that gets to buy the item. Plus, by the scarcity in the market, the name of the creator, and furthermore the work’s ownership history, and the dealer’s prestige, the starting auction bidding price, can hit really high.
But one of the reasons that Sotheby’s actually makes a decent profit, is because it charges commissions on sales for art and other assets within its portfolio. Future buyers pay a “buyer’s premium”, whose amount changes according to the value of the sale of the item. In 2020, this percentage reached 25% of the hammer price assets, which amounted to up to $400,000. However, most of the time, the standard seller’s commission is 10% per the registered auction amount.
Meanwhile, maybe the most important part of the company’s profitability is its private sales. The company has links with art galleries and helps dealers finance purchases. Also, special sales of works are made through collaborations with art dealers.
Today, Sotheby’s name is synonymous with innovation. The firm maintains offices and auctioning halls all around the globe. In addition, there are investments in real estate, appraisals, restitution, and storage, as well as in education. In education, specially designed programs, with campuses in New York and London, as well as distance learning capability for those who seek to specialize in the field of the art business and learn how this $60 billion worldwide art economy operates.
The firm constantly secures its reputation in the art market, by holding important events like Edvard Munch’s ‘The Scream’ (1893) in 2012, and with the sale of music icon David Bowie’s private collection of art under the events name “Deborah, Duchess of Devonshire: The Last of the Mitford Sisters” and “Bowie/Collector”, in 2016. Moreover, under its prestige and innovation, it is fair to mention that Sotheby’s is the first auction house that, during the 2020 global pandemic, when all of the museums and art fairs were closed, it was the one that held successfully hybrid digital auctions format, and created a new mobile and web experience, in order to increase the online market. Sotheby’s undoubtedly holds history, success, and an important place in the art world.
References
- About Sotheby’s Institute, sothebysinstitute.com, Available here
- Sotheby’s, britannica.com, Available here
- The History of Sotheby’s Auction House, sothebys.com, Available here
- Sotheby’s, investopedia.com, Available here
- Sotheby’s sells record $7.3bn of art so far in 2021, theguardian.com, Available here
- Sotheby’s Reports Record High of $7.3 B. in Sales for 2021, artnews.com, Available here
