Furloughs Continue as Auction Industry Shifts to Online Sales
Sotheby’s and Christie’s will join other auction houses in furloughing many of their employees due to the coronavirus. With more sales moving online and the industry beginning to see financial setbacks, the move has been anticipated. Phillips, Bonhams, and other large auction houses have taken similar cost-saving steps within the last several weeks.
“Like many businesses, Sotheby’s is adjusting to the challenging circumstances resulting from COVID-19 and taking the necessary steps to protect our employees and the future of the company,” a representative for the auction house said in a statement.
The Wall Street Journal reported that Sotheby’s will furlough around 200 people, 12% of its staff. Additionally, employees who have not been furloughed or laid off will see a 20% pay cut through early June. Top executives will take an additional 10% cut. This development follows the closing of 80 Sotheby’s offices and 10 salesrooms in late March. Christie’s has followed suit by furloughing staff members in France and the UK.
The furloughs follow delays and scheduling changes across the industry. Both Phillips and Christie’s have postponed their spring New York sales until at least June. Sotheby’s has postponed its May events indefinitely. To fill in the gaps during April and May, new online events will be offered. Scott Nichel, the head of Sotheby’s Impressionist and Modern art day sales in New York, issued a statement about the move online: “[We are] still actively—and responsibly—sourcing for these auctions, and encourage collectors to start a dialogue with us about how we can best meet their needs.”
Galleries and museums are also bracing themselves for the economic fallout of the pandemic. According to The New York Times, the Metropolitan Museum of Art projects a shortfall of $100 million and is beginning to investigate furloughs, layoffs, and voluntary retirements for staff members. The Tenement Museum has reduced staff by 20 percent. Meanwhile, Boston’s Museum of Fine Arts plans to furlough approximately 340 staff members and will remain closed through at least the end of June.
Though uncertainty about the art market remains as the COVID-19 situation evolves, recent online sales have seen strong showings. ArtfixDaily reports that 64% of Christie’s clients were already bidding online in 2019. Over 40% of new buyers have entered the market through online platforms. Private sales are also gaining attention from collectors.
A recent Sotheby’s event that was abruptly moved online brought in a total of $4 million, setting a new record for an online sale of 20th-century design. This exceeded the auction’s high estimate by more than 25 percent, bolstering industry confidence. In another sign of positive growth, a version of Banksy’s Girl with Balloon sold for GBP 375,000 (USD 465,000) in a late-March online auction.
Jodi Pollack, the co-worldwide head of Sotheby’s 20th-century design department, commented on the online sales: “Our record total… reinforces the confidence and shift we are seeing towards bidding and buying online. This result is an important indicator of the Design market’s momentum and growth at a much needed time.”
Online bidding platforms such as Bidsquare, Invaluable, and LiveAuctioneers continue to offer online sales and buy-from-home events. Online art auctions still show rapid growth rates of between 9% and 11% yearly, with estimates predicting total revenues of $9.32 billion by 2024.
As novice and seasoned collectors explore online sales during the outbreak, auction houses remain optimistic. A statement from Sotheby’s reflects this hope: “During this unprecedented moment when live auctions are not possible, collectors worldwide have enthusiastically participated in our online sales program, driving results that demonstrate the resilience of the global art market.”