Advanced Search

Sotheby's 4Q Profit +37%; Acquires 'Pink Star' After Buyer Default

Pink Diamond Enters Inventory Valued at $72M

Feb 28, 2014 10:09 AM   By Jeff Miller
Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share

RAPAPORT... Sotheby's reported that its revenue rose 16.5 percent year on year to $339.2 million for the fourth quarter that ended on December 31. Expenses increased 16.7 percent to $194.3 million, but interest income improved and interest expenses fell 33 percent to $9.1 million, leading to stronger income of $90.8 million compared with $66.1 million one year earlier. Full-year revenue increased 11.1 percent to $853.7 million and profit jumped 20 percent to $130 million, or $1.90 per share.

''Our record results in 2013 and a remarkable start to this year, with auction sales up significantly to date in 2014, show Sotheby’s is in an extremely strong position today,” said Bill Ruprecht, the chairman, president and CEO of Sotheby's.  “We pledge to provide unrivaled expertise and results for our clients and enduring value to our shareholders – and as these results demonstrate, Sotheby’s is delivering on those promises.”

pink star default

Sotheby's inventory rose significantly, by $100 million, in the fourth quarter principally due to acquiring the ''Pink Star,'' renamed the ''Pink Dream,'' a 59.60-carat, internally flawless, fancy vivid pink, type IIa diamond that sold in Geneva for $83,187,381 in November to  diamond cutter Isaac Wolf. Sotheby's stated that the buyer defaulted under an auction guarantee and it  reversed the related commission revenue and recorded the pink diamond in inventory at a value of approximately $72 million, which is the equivalent of the corresponding purchase price in Swiss francs. The Geneva sale of magnificent jewels in total had set a record at $199,512,930 against a presale estimate of $113 million to $153 million.

According to the company's filing, Sotheby's is currently pursuing a resolution with the defaulting buyer, while also considering other alternatives. ''In the meantime, we are quite comfortable with our valuation and see real value in owning it at this price,'' the statement noted. Sotheby's has reserved all of its rights and remedies against the defaulting buyer.

Sotheby's continues to invest in its digital media strategy via the website and its iPad and Android applications to facilitate accessibility to clients on mobile platforms. The website and BID now live auction bidding platform were both redesigned in 2013 to enable each to work across all tablet and mobile platforms, resulting in a significant increase in client usage, including a 45 percent increase in online bidding, a 50 percent increase in Asian client traffic and a 25 percent increase in time spent on mobile devices. In addition, clients in the Sotheby's Preferred client loyalty program have doubled their visits to over the past year, illustrating both the reach of mobile technology and the impact of a more engaging online experience with multilingual, especially Chinese, content, according to the firm.

Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share
Tags: default, diamonds, income, Jeff Miller, Jewelry, Pink Diamond, pink dream, pink star, Sotheby's
Similar Articles
Rapaport LogoRapaport Weekly Market Comment
Dec 02, 2021
Sentiment upbeat after strong start to holiday season. Jewelry sales +78% over Thanksgiving weekend, Mastercard
New York Diamond District 150US Polished Imports See Gentler Rise
Nov 30, 2021
US polished-diamond imports climbed 7% year on year to $1.43 billion in September, a slimmer increase than in the last few
Comments: (0)  Add comment Add Comment
Arrange Comments Last to First
© Copyright 1978-2021 by Rapaport USA Inc. All rights reserved. Index®, RapNet®, Rapaport®, PriceGrid™, Diamonds.Net™, and JNS®; are registered TradeMarks.
While the information presented is from sources we believe reliable, we do not guarantee the accuracy or validity of any information presented by Rapaport or the views expressed by users of our internet service.