Sotheby's operates as an auctioneer of authenticated fine art, decorative art, and jewelry. Segments The company operates in three segments: Agency, Principal, and Finance. Agency segment The Agency segment accepts property on consignment, stimulates buyer interest through professional marketing techniques, and matches sellers (also known as consignors) to buyers through the auction or private sale process. Prior to offering a work of art for sale, the company’s specialists perform significant due diligence activities to authenticate and determine the ownership history of the property being sold. Seasonality: The company’s financial results are seasonal, with peak revenues and operating income occurring in various quarters. Consequently, first and third quarter results reflect lower revenues when compared to the second and fourth quarters and, typically, net losses due to the fixed nature of many of the company’s operating expenses. Regulations: The company is subject to local auction regulations, such as New York City Auction Regulations Subchapter M of Title 6 §§ 2-121–2-125, et. seq. Competition: The company’s primary competitor is Christie’s International, PLC, a privately held, French-owned, auction house. It also faces competition from smaller auction houses such as Bonhams and Phillips. In the Chinese art market, the company competes with Beijing Poly International Auction Co. Ltd.; China Guardian Auctions Co. Ltd.; and Beijing Hanhai Auction Co. Ltd. Principal segment The Principal segment includes the sale of artworks that have been purchased opportunistically and, to a lesser extent, retail wine sales and the activities of Acquavella Modern Art, an equity investee. Under certain circumstances, the Principal segment provides secured loans to certain art dealers to finance the purchase of works of art. In these situations, the company acquires a partial ownership interest in the purchased property in addition to providing the loan. Upon its eventual sale, the loan is repaid and any profit or loss is shared by the company and the art dealer according to their respective ownership interests. The Principal segment also holds the remaining inventory of Noortman Master Paintings (NMP), an art dealer. The company is executing its sale plans for NMP’s remaining inventory. Finance segment The Finance segment provides certain collectors and art dealers with financing secured by works of art that the company either has in its possession or permits borrowers to possess. The Finance segment makes two types of secured loans: advances secured by consigned property where the borrowers are contractually committed, in the near term, to sell the property through Sotheby's; and general purpose term loans secured by property not intended for sale (a ‘term loan’). Term loans allow the company to establish or enhance mutually beneficial relationships with borrowers and may generate future auction or private sale consignments and/or purchases. In certain situations, term loans are also made to refinance accounts receivable generated by clients' auction and private sale purchases. Brand Licensing Activities Prior to 2004, Sotheby’s engaged in the marketing and brokerage of luxury residential real estate sales through Sotheby’s International Realty (SIR). In 2004, the company sold Sotheby’s International Realty (SIR) to a subsidiary of Realogy Corporation (Realogy). In conjunction with the sale, the company entered into an agreement with Realogy to license the SIR trademark and certain related trademarks for an initial 50-year term with a 50-year renewal option. The Realogy License Agreement is applicable worldwide. The Realogy License Agreement provides for an ongoing license fee during its term based on the volume of commerce transacted under the licensed trademarks. The Sotheby’s name is also licensed for use in connection with the art auction business in Australia, art education services in the U.S. and the United Kingdom (U.K.), and print management services. Significant Events In July 2014, eBay and Sotheby's announced a partnership. Together, they are developing an online platform that would make it easier for millions of people worldwide to discover, browse and acquire exceptional works of art, antiques and collectibles. History Sotheby's was founded in 1744.
sotheby's (BID:New York)
1334 York Avenue
New York, NY 10021
|Jones Lang LaSalle Inc||$129.49 USD||+0.04|
|Realogy Holdings Corp||$40.90 USD||+0.68|
|Spectrum Group International Inc||$525.00 USD||0.00|
|View Industry Companies|
Sponsored Financial Commentaries
To contact SOTHEBY'S, please visit www.sothebys.com. Company data is provided by Capital IQ. Please use this form to report any data issues.