Sotheby’s takes a knock as Hong Kong autumn auctions record 17pc decline in takings
The development comes as mainland Chinese auction house Poly takes up the slack in jewellery sales, marking major encroachment into turf of major Western houses
Sotheby’s suffered a reversal of fortune this week as it sold 17 per cent less in its autumn auctions than a year ago. Just six months ago, the US-listed auction house brought unexpected cheer to the market with a 17 per cent year-on-year growth in its Hong Kong spring sales.
The auction world behemoth dominates the global market with Christie’s and remains an important barometer for the spending habits of the ultra-rich – its two main Hong Kong seasons traditionally precede Christie’s by weeks.
This week’s sale came to just HK$2.2 billion, including commissions paid by the buyers, a spine-chilling 29 per cent less than the HK$3.1 billion tally in April.
But the pain was not evenly spread among the different categories. The roughly HK$460 million shortfall – compared with last October – came mainly from the jewellery and Chinese works of art (antiques) departments.
Jewellery sales were disastrous, yielding just HK$192.7 million – a far cry from April’s HK$572 million. The top items went unsold, including a jadeite bangle estimated at HK$50 million to HK$70 million and the overall sell-through rate was a paltry 59.9 per cent.
“What emerged this week is that there is some resistance at certain levels. While we were disappointed that a number of highlights failed to find buyers, we were pleased with a number of notable prices achieved,” the jewellery team said in an emailed statement.
Rather than pointing to much weaker demand for sparklers and jade, some of Sotheby’s market share appears to have shifted to Poly Auction, mainland China’s biggest auction house.
For the first time since Poly began sales in Hong Kong four years ago, it managed to sell more jewellery than Sotheby’s, marking a major encroachment into the Western houses’ territories beyond its traditional strength in Chinese paintings and calligraphy.
A 24 per cent jump in its jewellery sales to HK$207 million from last year helped boost Poly’s total auctions tally this week to HK$1.1 billion, up 22 per cent.
“When we first came to Hong Kong, 80 per cent of our clients were mainland Chinese. Now, 80 per cent are from outside the mainland. This shows we are successful in our internationalisation strategy.
“It means little for us to lead the pack in Chinese paintings. Leading in a category like jewellery, which Chinese houses are not known for, is a lot more significant,” said Bill Zhao Xu, Poly’s executive director.
He said while reasonable pricing would have helped sales, a big reason for Poly’s stellar growth was the support of powerful collectors such as Tiffany Chen, vice- chairwoman of China Star Entertainment who bought the world’s most expensive briolette diamond from Christie’s in 2013, and Angela Leong On-kei, whose celebrity daughter Sabrina Ho Chiu-ying now heads Poly’s Macau business.
Sales outside the jewellery category for Poly were relatively flat, however, apart from the seventh special sale of Chinese artist Cui Ruzuo’s paintings in Hong Kong. Works by the controversial artist – who has become one of the most valuable living artists in the world despite being relatively unknown – fetched HK$354 million in this week’s sale.
Sales of Sotheby’s Chinese works of art fell 21 per cent from a year ago and 33 per cent from spring. They also compared poorly against the 58 per cent growth in sales at Sotheby’s Asia Week auctions in New York last month.
This, experts said, was due to the lack of blockbuster items that were found in earlier sales, such as the Pilkington Collection of ceramics that yielded HK$502.8 million in April.
“Sotheby’s April sale of the Pilkington Collection was great. It marked a complete change of mood after a year-and-a-half of gloom,” veteran Chinese antiques dealer Nader Rasti said.
The Pilkington sale showed that a combination of reasonable estimates and good quality would always find buyers, he said. This would explain the success of the Roger Keverne sale in Hong Kong this week – an auction of the personal collection of the well-respected London dealer that saw nearly everything sold.
There were other weak areas, such as contemporary ink sales. A much-publicised Liu Xiaodong painting, called Showered in Sunlight (1990) was sold at a hammer price of HK$15 million, at the lowest-end of pre-sale estimates.
Market watchers said it probably reflected the over-aggressive pricing for a work that was only sold for around 6 million yuan (HK$7 million) in 2009.
There were bright spots, too, such as in wine and the healthy demand in the high-profile contemporary art sale curated by K-pop megastar T.O.P.
“There’s still plenty of money around. People talk about the China slowdown and so on, but all we’ve seen is that people no longer buy willy-nilly. They have simply become more selective,” Rasti said.