Sotheby’s has reported first quarter revenues of £65.9 million, a 3% reduction from the same period in 2012, continuing a trend that also saw its revenues slip overall last year.
The auction house put the disappointing result down to an over-reliance on the most expensive lots, where competition for commission is at its fiercest. Typically the auction house receives less back per pound of sale as the price of the lot increases.
As such, the lackluster result is not reflected in the quantity of sales, which are up 23% year on year for the same period.
The company reported an 11% drop in commission revenue between 2011 and last year, and a 10% reduction in net auction sales. Its net income for 2012 was £70.1 million, down 37% from 2011 because of decreased revenue and a bond refinancing.
The Wall Street Journal reported last night that the quarterly results caused Sotheby’s share price to slide by 3% in the wake of the news.
The auction house has tried to counteract current trends towards the upper end of the market by increasing its buyers’ premiums.
From March 15, buyers at auction paid 25% on the first $100,000 (£64,800) of hammer price; 20% on the portion of hammer price above $100,000 up to and including $2 million (£1.3 million); and 12% on any remaining amount above $2 million.