Sotheby’s names Linus Cheung first director from Asia
Cheung is retired CEO of Hong Kong Telecom and a leading collector of Chinese art
Sotheby’s elected Chinese businessman and art collector Linus Cheung as its first director from Asia, working with its largest shareholder to add expertise in a key market.
The New York-based auctioneer of fine art and collectibles announced the move along with a wider third-quarter loss as sales declined in a contracting market, according to separate statements Monday.
The company’s net loss grew to US$54.5 million, or 99 cents a share, from $17.9 million, or 26 cents, a year ago. Excluding certain items, the adjusted loss was 78 cents a share, compared with an expected 57 cents, the average of three analysts in a Bloomberg survey.
Sotheby’s, whose shares gained 34 per cent this year through last week, is seeking to make a turnaround under Chief Executive Officer Tad Smith. The acquisition of private firm Art Agency Partners in January for as much as $85 million prompted departures by several top dealmakers just as the art market’s contraction accelerated. The company has made progress more recently, winning the $100 million collection of Ann and Steven Ames for this month’s marquee auctions in New York.
Cheung is the retired CEO of Hong Kong Telecom and a prominent collector of Chinese art, Sotheby’s said in a separate statement. He served on the boards of companies including Cathay Pacific Airways Ltd., Hong Kong Telecom and Taikang Insurance Group.
Taikang became Sotheby’s largest holder in July, with 14 per cent of the shares.
The Chinese insurer’s chairman and CEO, Chen Dongsheng, is also the founder and president of China Guardian Auctions Co., one of the country’s biggest auction houses.
In September, Sotheby’s and Taikang began searching for an independent director and the activist shareholder agreed not to increase its stake until the person was chosen. In connection with Cheung’s unanimous election to the board, Taikang agreed not to increase its ownership position beyond 15 per cent for a period of three years, subject to certain conditions, Sotheby’s said Monday.
“I am delighted to be joining the board of Sotheby’s, a company I have long admired during my decades as a collector,” Cheung said in the statement. “As the art market continues to evolve and grow in China and across Asia, I look forward to sharing my expertise and experience to best position the company for future success.”
The upcoming bellwether sales of Impressionist, modern, postwar and contemporary works are expected to tally at least $1.06 billion, a 49 per cent drop from the low estimate a year ago, at Sotheby’s, Christie’s and Phillips.
“There is certainly less supply as sellers believe the market has cooled,” David Schick, an analyst at Consumer Edge Research, said in an interview before the results were released. “There is more subdued buyer activity as well.”
The first and third quarters tend to be seasonally slower for Sotheby’s, which holds its main auctions in New York during May and November. The latest results were also affected by a scheduling change that moved an additional contemporary art auction in London into the third quarter in 2015, boosting the company’s year-ago results. This year, a similar auction took place in the second quarter, as usual.
“The calendar shift of the London contemporary auction hurts optics,” Schick said.