Given Sotheby’s was founded in 1744 and Christie’s in 1766, it is remarkable that these two British auction houses continue to dominate the trillion-dollar global art market. According to 2022 figures, Christie’s is No 1 in the world with sales of US$8.4 billion, with Sotheby’s just behind at US$8 billion.
Their enduring success arguably relies on the fact that while both brands trade on their famous name and long heritage, they have never been afraid to shake things up to stay relevant.
This has taken many guises, with two of the biggest changes in recent decades being shifting from exclusively selling fine art to incorporating jewellery, fashion, property and more; and moving their centre of gravity away from London and New York to embrace Hong Kong, Shanghai and Tokyo.
In 2021, with the pandemic abruptly changing the entire industry and with 19th-century European art rapidly falling out of fashion, Christie’s and Sotheby’s both abandoned their traditional stand-alone evening sales that focused on Impressionist, modern and contemporary art, and instead moved into a new realm of part-live, part-online auctions that mixed 20th and 21st century works from around the world. This was largely done to appeal to collectors that were not only younger, but increasingly based in Asia, Africa and South America – a trend clearly witnessed first-hand in Hong Kong.
Now, auction houses are showing their power by acquiring some of the most coveted property in the world. In Hong Kong, Sotheby’s is taking over Chater House, formerly occupied by Armani. The auction house’s lease on the two-storey space will begin this autumn, with a gallery due to open the following year. The space will be used to host auctions and exhibitions, and will also include a coffee station and bar.
In New York, they bought the Breuer Building on Madison Avenue, a masterpiece of Brutalist architecture that was built in 1966 and which housed the Whitney Museum of American Art until 2015. Sold to Sotheby’s for an estimated US$100 million, the building is set to become their global headquarters, and will also incorporate an exhibition space.
“We wanted to put Sotheby’s in the centre of Hong Kong, which remains an art and luxury hub; that also applies to the Breuer. In Paris, we have acquired a building right by the Presidential Palace on Rue du Faubourg Saint-Honoré that will also put Sotheby’s in the heart of the city where it belongs,” says Nathan Drahi, Sotheby’s managing director in Asia.
“Part of this is due to our willingness to associate our brand with beautiful buildings – the Breuer is famous for its Brutalist architecture and in Paris the building we have taken over used to house a famous gallery, but in every city we also want to be in the centre of the art community and not sealed behind a door or inaccessible to new customers.”
Sotheby’s isn’t the only company with major expansion plans. In Hong Kong, Christie’s is opening its new Asia-Pacific headquarters at The Henderson – a brand-new skyscraper designed by Zaha Hadid Architects that will be in use by the end of this year.
“Since launching our Asia Headquarters in Hong Kong in 1986, we’ve experienced remarkable growth in buying interest and collector engagement,” says a spokesperson for Christie’s. “To accommodate this expansion and enhance our services, we recognised the need for a larger, more versatile space. With 50,000 sq ft anchoring four storeys within the new tower, we will be able to provide exceptional service to our clients and long-needed flexibility to transform our sales and events schedule from two main seasons a year, to year-round programming.”
Not far behind, Phillips – another British auction house, founded in 1796 and ranked fourth in the world in 2022 – also opened an impressive new headquarters in Hong Kong’s West Kowloon Cultural District during Art Basel this year. Designed by Herzog & de Meuron and Laab Architects, it is in prime position opposite M+ and the Hong Kong Palace Museum.
Sotheby’s has more expansion in mind too, opening offices in Tokyo and South Korea, and a new headquarters in Shanghai. “It’s down to the strength of the art market – in 2019 Sotheby’s was making US$6 billion, last year it made US$8 billion – that’s substantial growth,” says Drahi.
It is interesting that, in a world that is increasingly focused online and stepping away from traditional practices, these auction houses are still flourishing.
“When it comes to buying aspirational objects – it’s all down to trust, especially in the realm of the secondary market,” explains Drahi. “We don’t manufacture so we need our reputation – and, sure, for a sneaker you can go online, but a brand operating for 279 years that is global and from the highest form of establishment is what you want for something expensive, because it gives you trust, reliability and track record.”
“We are also where the physical meets the digital, and online platforms can’t do this – that’s why we need our central locations,” he adds.
While these companies are experiencing impressive growth and remain the most trusted source for high-net-worth individuals and experienced collectors, not everything has gone their way recently.
“Auction houses remain the go-to platform for collectors – whether you’re a buyer or seller – but in the last few seasons some of their dominance has been due to the rise of guarantees,” says Alexandre Errera, a private art dealer based between Hong Kong and Milan.
This means that when a piece of art is sold, the auction house guarantees a minimum sale by selling it in advance to a third party – usually a dealer or another collector or someone who loves the artwork but can’t afford to bid.
“It was a very strong tool that attracted a lot of consignors,” says Errera. “But now we are seeing fewer guarantees as there is less appetite to take on the risk from third parties due to rising interest rates. This puts auction houses in a tricky position – one of their main weapons is not as effective as before.”
This, perhaps, is part of the reason behind their major expansion, as they are now looking to diversify their portfolio. “We have a mandate to make people understand we’re so much more than an auction house,” says Drahi. “Our reach is now much wider than that.”
It will be interesting to see where this takes them and how expansive that reach becomes.
Want more stories like this? Follow Style on Facebook, Instagram and YouTube.