I‘m aware of the high costs of premium real estate renting and insurence coverage but they don’t hold one or two auctions a year, they hold multiple Auctions a month.
They have their big watch auctions about 3-4 times per year plus online auctions from time to time. They have huge overheads and people costs. Watches in particular are not big profit drivers for the auction houses. It's really fine art that keeps them in business.
Wasn't Sotheby's just purchased (taken private) last year for something like $4B?
https://www.globenewswire.com/news-...ts-2019-Second-Quarter-Financial-Results.html
„“We are very pleased with our second quarter and first half performance,” said Tad Smith, President and CEO“
It‘s not like the big auction houses seemed to be short on cash in the last 2 years, that’s why i‘m Wondering why such claims are being made by them now apparently.
Cheers,
Max
I should have clarified that stocks statement.
People are moving their money away from the bank accounts. For stocks , indexes etc it‘s very cheap to buy in right now and it may get even cheaper if the economy keeps tanking. People are afraid that we might get to the stage of hyper inflation, so while your stocks might recover (long term holding for at least 10 years) your money in the bank might be worth next to nothing if Inflation hits.
BTT:
I‘m aware of the high costs of premium real estate renting and insurence coverage but they don’t hold one or two auctions a year, they hold multiple Auctions a month.
Most of the auction houses raked in tons of money in the last years with prices rising for tangible assets (at least since 2008).
If they run (I can’t imagine that) on such a small Marging that they barely survive with the costs of their overhead than it was / is a massive miscalculation on their part, as would be with every other business. I don’t believe that these companies aren’t clever enough to avoid such a miscalculation.
Again, the results of the overall company do not show the picture of how a particular segment such as watches performs. If you take Sotheby's for example, watches accounted for about 10% of total revenue in 2018. So 90% is mostly fine art and jewelry.
I would agree that being short of cash is probably BS and anyone that works at an auction house who would say comment like that is unprofessional.
All I'm saying is that watches account for a small part of the auction world and cost structures are likely high.
I also think that you probably overestimated the margins of these auction houses. The people, the marketing, the rent are all expensive, and the competition of other auction houses, online auctions and dealers, have really cut into their margins.
I think we are essentially on the same card. Maybe there was a misunderstanding, I was of course talking about Sotheby’s as a whole company, not separately looking at the watch auctions they are holding. I don’t think that their different sections work with separate resources and funds.
If you think that ca. 60 million $ NET income in the first quarter of 2019 alone and a ca. 30% increase compared to 2018 is overestimating on my end then we just have a different understanding of their margins and cost they are operating on. 😉.
BTT:
I should have bought Creme/pana Dial EXPL II‘s.... a Watch that went totally under my radar the past couple of years.
I should have bought Creme/pana Dial EXPL II‘s.... a Watch that went totally under my radar the past couple of years.
Wasn't Sotheby's bought by P Drahi recently?
I think for watches their goal may be to get high end dealers prices, without the work (no service, no warranty, ...) and without the stock. Trade watches as art.
