RAPAPORT... Sotheby's reported an 18 percent year-on-year revenue decline to $303.9 million and that, subsequently, its profit fell 33 percent to $85.4 million during the second quarter that ended on June 30. The lower revenue and net income reflected a decrease in net auction sales compared with one year ago, according to the auction house. In particular, Sotheby's noted a 67 percent year-on-year decline in single-owner sales volume in the second quarter and a 55 percent decline for the first half. Revenue for the first six months of the year fell 16 percent to $408.9 million and profit declined 42 percent to $74.8 million.
The impact of the lower revenue was partially offset by an 8 percent reduction in expenses. The results were negatively impacted by incremental expenses related to resolving a labor dispute with unionized New York art handlers, the bulk of which was for severance benefits to be paid to certain union members in exchange for their voluntary separation. Sotheby's management believes that future labor costs have been reset in an attractive and sustainable way, according to its statement.
"Our operating results reflect some tremendous successes, but also reflect the challenging global economy, a tough comparison to the best quarter in Sotheby's history a year ago, and a competitive climate for high-end consignments," said Bill Ruprecht, Sotheby's president. "Demand and prices remain strong, especially at the high-end of the market, as reflected in our highest ever sale of Impressionist and Modern Art of $373.3 million in May in New York.
"We're pleased to report that our financial services business grew substantially in the first half of 2012 and private sales are an increasingly important contributor to our revenue stream. We have seen a slowdown in the Asian market alongside the economy there, but it continues to be very profitable and a source of substantial opportunity for Sotheby's," he concluded.