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founded: 1744

Contact Information:

headquarters: 1334 york avenue
new york, ny 10021 phone: (212)606-7000 fax: (212)606-7027 toll free: (800)700-6321 url:


Sotheby's, with 98 offices in 38 countries, is one of the world's leading auction houses. The company divides its business activities into three segments: the auction segment, the finance segment, and the real estate segment. Sotheby's primary activity is the auctioning of art, antiques, and collectibles in more than 90 categories, including paintings, sculpture, jewelry, ceramics, furniture, rare books and manuscripts, and other objects. Sotheby's holds auctions in its auction rooms in North America, Europe, Asia, and Australia. Its staff of internationally recognized specialists identify, evaluate, and appraise works of art before they go up for auction. Once appropriate works have been selected and their value and authenticity established, Sotheby's utilizes various marketing techniques, including glossy catalogues, public and private exhibitions, and personal contact between Sotheby's staff and individual collectors to generate interest in an auction. Finally, Sotheby's brings buyers and sellers together at auctions. Sotheby's holds auctions in New York and London, as well as in 14 other countries including Australia, Italy, India, Japan, and China. Sotheby's also conducts online auctions on its Web site.

Sotheby's acts as the agent of its sellers. It accepts the seller's property on consignment, bills the purchaser, and pays the seller. Sotheby's receives a commission from sellers based on the so-called "hammer price," the last offer made before the auctioneer's hammer fell and closed bidding on the item, known as a "lot." The rate of the commission is based on a sliding scale or may be negotiated individually with particularly valued sellers. Buyers must also pay Sotheby's a premium equal to ten percent of the hammer price. Occasionally, for example, to secure the rights to auction particularly prestigious works or collections, Sotheby's will guarantees a seller a minimum price for an item. If that amount is not bid at auction, Sotheby's must pay the seller the difference.

Sotheby's finance segment provides sellers and buyers with financing, usually guaranteed with works of art as collateral. The company extends advances to sellers based on the anticipated selling price of objects or collections. More controversially, in the past Sotheby's also extended loans to buyers prior to auctions, a practice that critics claimed made Sotheby's a not-wholly-disinterested auctioneer. Sotheby's real estate segment, represented by its subsidiary Sotheby's International Realty, Inc. (SIR), assists clients throughout the world in the purchase of so-called luxury properties. Such properties include resorts, ranches, farms, and residences. SIR operates 16 of its own brokerage offices in the United States, Britain, France, and Australia. Sotheby's also has five regional offices in Manhattan; Palm Beach, Florida; Newport Beach, California; Boston, Massachusetts; and Munich, Germany; as well as a representative in Hong Kong.


Two and a half years of criminal scandal, lawsuits, and expensive class action settlements have shattered Sotheby's bottom line and sent its stock price plummeting. Sotheby's $1.94 billion in total auction sales in 2000 was down from $2.26 billion in 1999—a fourteen percent drop. Sotheby's 2000 revenues totaled $397.79 million and marked the second year of decline after climbing to $447.05 million in 1998. Along with the drop in revenue, Sotheby's reported a whopping after-tax loss of $189.7 million in 2000. The loss was due largely to the discovery of Sotheby's involvement in a massive price-fixing scheme, which resulted in millions of dollars in civil and criminal fines. The 2000 loss translated to a loss in earnings of $3.22 per share. Sotheby's share price did not fare well in the atmosphere that surrounded the price-fixing investigation either. It plunged from a high of $46.75 in the second quarter of 1999 to slightly higher than $10 in November 2001, just before the trial of Sotheby's former chairman, A. Alfred Taubman began. The stock recovered and hovered around $15 for a couple weeks in early 2002, fueled by rumors that Taubman was going to sell his controlling share in the company. The price subsequently dropped again in February 2002.

Fine arts accounted for 57 percent of Sotheby's auction sales in 2000; decorative arts accounted for about 27 percent; jewelry, rare books, and other areas accounted for 16 percent. Approximately 54 percent of the firm's auction sales were made in North America, primarily at its New York City auction rooms. About 41 percent were made in Europe and a little more than 5 percent were in Asia. Those numbers remained more or less constant from 1999.


Wall Street analysts took a highly cautious stance toward the beleaguered auction house in 2001. On the positive side, by spring 2001, Sotheby's had settled the civil litigation that followed the accusations of price-fixing with Christies, litigation that had threatened to force Sotheby's into bankruptcy. Furthermore, the company had installed new upper management, replacing convicted chairman A. Alfred Taubman and self-confessed conspirator president Diana D. Brooks. Its online auction site was up and running as well. Nonetheless, a Dain Rauscher Wessels report bleakly stated, "The outlook ahead is troubling." Auction sales continued to drop going in to 2001, "the continuance of a disappointing trend of missed (or perhaps mismanaged) expectations," as the report put it. Market forces were conspiring against Sotheby's as well. Demand for million dollar paintings that were not top-line was drying up, and Sotheby's continued speculation in that area was a questionable strategy. Phillips Auctioneers, although still a distant third behind Sotheby's and Christie's, was backed by a parent company with deep pockets and had positioned itself as a legitimate challenger to the long-established duopoly. In all, Dain Rauscher Wessels painted a bleak picture of Sotheby's future, citing "a loss of confidence in the predictability of the business model. . . .a justifiable concern over operating inefficiencies." The report concluded by bluntly warning investors off from Sotheby's: "We believe the only reason the stock should be held is on the hope of a buyer surfacing—otherwise avoid it."


Sotheby's traces its history back to 1744, to the firm of Samuel Baker, who sold antiquarian books at first through catalogues and later in his own premises in London England. It was not until 1778—12 years after Sotheby's twentiethth century arch-rival Christie's was founded—that Baker and his partner George Leigh invited John Sotheby to join their business. By 1823 the other partners had died without heirs, and Sotheby's grandson Samuel was the business' sole proprietor. The same year the firm made news when it auctioned the collection of books that Napoleon had taken into exile on St Helenas. By mid-century, the company had branched out into autographs and prints, but not until the twentieth century did it venture to auction paintings or other works of fine art.

In 1861 the last Sotheby died without leaving an heir, and the company passed into other hands. The name had acquired a reputation by then, and it was kept, even as new partners added theirs to it. In 1909 a partnership led by Montague Barlow purchased the business. Over the next ten years, Barlow engineered a series of coups for the firm, the most noteworthy of which was the 1913 auction of the love letters of poets Robert Browning and Elizabeth Barrett. In 1917 Barlow oversaw Sotheby's move into new quarters just blocks from Christie's in London's Mayfair district. It was not until after World War I that Sotheby's diversified into paintings, in particular the venerable Old Masters that had been Christie's stock in trade for the better part of two centuries. That unleashed a cutthroat competition that had the bitter flavor of a blood feud in which the two sides could scarcely bring themselves to utter the other's name. It continued unabated—even as the two firms were secretly fixing prices together to avoid destructive price wars—into the twenty-first century. One of Barlow's most significant innovations was to hire acknowledged experts in specific areas of art to evaluate and appraise works that were up for auction at Sotheby's. Their careful, scholarly descriptions in Sotheby's catalogues won the company unprecedented levels of trust among buyers.

Peter Wilson is acknowledged as the individual who forged Sotheby's into the internationally renowned global company that made headlines in the latter half of the twentieth century. Wilson was a classic success story, starting as a lowly porter and working his way up quickly to become a director and eventually Sotheby's chairman and president. He inaugurated a period that one employee of later called "one long party." The "party" was characterized by the aggressive pursuit of art and collectibles to auction—most notably the vast collection of King Farouk of Egypt, which Sotheby's auctioned over a 27-day period in 1954 for £750,000. The auction of the modern art collection of Wilhelm Weinberg, a collection that included several Van Goghs and brought in over £326,000, put Sotheby's on the map for good. In the 1958-1959 season, Sotheby's for the first time had more turnover than its rival Christie's, a lead it would widen dramatically over the next two decades. Wilson also oversaw Sotheby's growth into an international auction house. In 1964 he engineered the takeover of the Parke Bennet auction house in Manhattan. By the time Wilson retired in 1979, Sotheby's had offices for both auction and real estate in several European countries, Asia, Canada, and on both coasts of the United States, and its sales had increased tenfold since the middle 1960s. It had also gone public, making a stock offering in 1977.

When Wilson left, Sotheby's was deep in the throes of an economic downturn brought about by the international economic recessions of the 1970s, as well as by an overly relaxed corporate management style leftover from the first half of the century when the company had a staff in the low two figures instead of the thousands. Wilson's departure only exacerbated a bad situation. With no strong leader at the helm, losses mounted even more quickly and the share price dropped. Abruptly, in 1982, the company was faced with a hostile takeover by two American businessmen who had made their fortunes in the carpet business. The British Parliament intervened rather than allow a national institution to be taken by such buyers. The firm found its savior in the person of A. Alfred Taubman, a real estate magnate from Michigan who had become wealthy many times over building upscale shopping malls. In 1983 Taubman obtained a controlling interest in Sotheby's.

Taubman introduced modern, efficient business practice to Sotheby's. He also set about to get rid of the British snobbishness that he had found so off-putting himself when he first attended auctions there. As a result of Taubman's changes—along with the bullish art market of the 1980s—Sotheby's returned to profitability. Indicative of its recovery was its auction in 1987 of a Van Gogh for £30 million. But the sale also foreshad-owed troubles when it was later revealed that Sotheby's had lent half the cost of the painting to the buyer—who later reneged on the payments! Other scandals followed in the 1990s. It was revealed that for many years Sotheby's had routinely looked the other way when art works were smuggled into Britain, or they even encouraged or assisted sellers in breaking export laws. It was also revealed that Sotheby's had sold numerous furniture forgeries in mid-decade, some of which had drawn record prices. The most damaging revelation came in 2000 when the U.S. Justice Department launched an investigation into allegations of a conspiracy between Sotheby's and Christie's to fix their commission rates. By the time the criminal and civil litigation ended in December 2001, both houses had to pay millions in fines and damages. Diana D. Brooks, the company's charismatic president was forced to resign and turn state's evidence. A. Alfred Taubman, Sotheby's 71-year-old chairman and majority share holder was eventually convicted on antitrust counts.

FAST FACTS: About Sotheby's

Ownership: Sotheby's is a publicly owned company traded on the New York and London Stock Exchanges.

Ticker Symbol: BID

Officers: William F. Ruprecht, Pres. and CEO, 46, 2000 base salary $500,000; Robin Woodhead, EVP and CEO Sotheby's Europe and Asia, 50, 2000 base salary $383,598; William S. Sheridan, EVP and CFO, 47, 2000 base salary $350,000

Employees: 2,048

Principal Subsidiary Companies: Sotheby's has facilities and subsidiary companies in North America, Europe, Asia, and Australia. Sotheby's International Realty, Inc., its real estate subsidiary, is headquartered in New York City. Its English auction house, Sotheby's (U.K.), is based in London.

Chief Competitors: Sotheby's faces competition in both its auction business and its real estate business. Its real estate segment competes almost exclusively with small, local real estate agents. Its auction segment competes with numerous private art dealers, auction houses, and online auction sites. It main competitors in this area are Christie's and Phillips Auctioneers.


Historically, Sotheby's clientele was comprised almost exclusively of a relatively small coterie of international art collectors, and personal contact with such collectors was Sotheby's most important tool. From the 1980s on, however, as the number of large private collections of noteworthy art has declined, Sotheby's has relied more and more on drawing middle class collectors to its auctions. They have added lower-priced objects as well as popular culture objects, such as the Jacqueline Kennedy Onassis estate or various bits of Hollywood memorabilia. The Internet is also expected to draw a number of first-time buyers from the middle-brow segment to Sotheby's. The challenge for Sotheby's in this strategy is to reach less affluent buyers without tarnishing the company's upper-crust patina. Britain is seen as presenting greater opportunities in the middle market. Sotheby's primary focus in the United States will continue to be high end buyers.


In a misguided attempt to negotiate a way out of the recession they found themselves in following the 1991 Gulf War, executives of Sotheby's and Christie's held secret meetings in which they hammered out a plan to end their self-destructive price wars: they would set fixed commission rates that both companies would thereafter abide by. The conspiracy came to light in 1999 when the U.S. Justice Department discovered documents detailing the negotiations and naming names. Christie's made a deal with the Justice Department to avoid prosecution. Later, Sotheby's president Diana D. Brooks agreed to cooperate with prosecutors as well. She became the star witness in the trial of A. Alfred Taubman, Sotheby's majority stockholder and chairman. It ended with Taubman's conviction of conspiracy to fix prices. Earlier, a huge class action suit against both auction houses resulted in damages of $256 million each. Criminal fines against Sotheby's were subsequently lowered so as not to force the firm into bankruptcy, which would have left Christie's—which had been given amnesty for its role—the only big auction house.

The case, nonetheless, will continue to have important consequences for Sotheby's. Even before his conviction, Taubman seemed resigned to selling his controlling share in the company. The one factor that delayed the sale was probably the extremely depressed price of Sotheby's stock as a result of the scandal—it dropped from more than $46 a share in 1996 to a low of about $10 in late 2001. The trial will have repercussions for Sotheby's relations with sellers for some time that go beyond general skepticism about auction industry practices. Previously, the details of contracts with sellers were closely kept secrets. In order to snare a prestigious collection, Sotheby's was often willing to forgo part of or even all of a commission, as well as to make sizable loans to collectors against the promise (or likelihood) of a future auction. Many of those delicate details were described in detail in the New York courtroom. The case will cause regulators in New York State to scrutinize Sotheby's and other auction houses more carefully after a decade or more of leaving them to their own devices.

CHRONOLOGY: Key Dates for Sotheby's


Samuel Baker begins selling books in London England


On death of Samuel Baker, John Sotheby becomes a partner in Leigh and Sotheby


Samuel Sotheby sells Napoleon's collection of books


Samuel Leigh Sotheby takes full control of the book business


Montague Barlow, Felix Ware, and Geoffrey Hobson take over Sotheby Wilkerson and Hodge


Company reorganized as Sotheby & Co.


Elizabeth Barrett-Robert Browning letters are auctioned by Sotheby Wilkerson & Hodge


Peter Wilson becomes Sotheby's chairman


Sotheby's acquires Parke-Bernet in New York City


Sotheby Parke Bernet Group goes public


A. Alfred Taubman acquires company and changes its name to Sotheby's


Sotheby's auctions the estate of Jacqueline Kennedy Onassis


Sotheby's chairman A. Alfred Taubman and president Diana D. Brooks resign amidst allegations of conspiring with Christie's to fix prices on commissions


A. Alfred Taubman is convicted of conspiring to fix prices


Sotheby's has extended its auction rooms into virtual space. It has started holding online auctions of works of art and other collectibles on its Web site, Sotheby' An important difference between Sotheby's Internet auctions and those at eBay, for example, is that the provenance of Sotheby's objects has been authenticated by the company's staff of experts. Sotheby's online auctions began in 2000. Another more disturbing trend for Sotheby's is the rise of Phillips, de Pury & Luxembourg as a legitimate force in the auction world. Phillips is controlled by Bernard Arnaud, owner of the luxury goods group LVMH, a man with the financial resources to make a run at the supremacy of the Sotheby's-Christie's duopoly.


Constantly searching for new markets for its auctions, Sotheby's has expanded its offerings to attract collectors who do not have the resources (or perhaps the interest) to purchase fine art or antiquities. They have organized so-called "theme" sales, such as the auctions of possessions once belonging to Lady Diana or Jackie Kennedy Onassis. They have also auctioned Arabian horses, sport pictures, guns, and movie memorabilia.


Sotheby's maintains offices on five continents. Besides its main auction rooms on York Street in Manhattan and New Bond Street in London, it also has auction facilities in Amsterdam, Geneva, Madrid, Milan, Munich, Paris, Rome, and Zurich. Sotheby's also has auction rooms in various Asian cities, including Hong Kong, Seoul, Singapore, Taipei, and Tokyo, as well as in Australia, South America, and Canada. Sotheby's International Realty has offices in North America, Europe, and Australia. Sotheby's global reach is important for more than simply snagging important collections that are scattered across the world. Certain types of objects command higher prices if auctioned in a particular country rather than New York or London. For example, Chinese antiquities sell for significantly more money if auctioned in the Far East.


The first of Sotheby's modern day blockbuster pictures was a Cézanne painting put up for auction by collector Erwin Goldschmidt in October 1958. The picture, Boy in a Red Waistcoat, was part of a group of Impressionist masters, and the auction drew the attention of the world. Among the audience at Sotheby's the day of the auction were actor Kirk Douglas, writer Somerset Maugham, and dancer Margot Fonteyn. Before the bidding opened, experts believed the Cézanne would bring in at most £30,000. By the time bidding had concluded, the Cézanne had reached a breathtaking £220,000. Auctioneer Peter Wilson drew laughter from the crowd when he asked in surprise, "Will no one offer any more?" It was the most money paid for a painting up to that time.


Sotheby's employed 2,048 workers at the beginning of 2001—916 worked in North America, 777 in Great Britain, and 355 worked elsewhere in the world. Most of Sotheby's employees were active in the auction segment (1,709). These employees ranged from administrators to experts in various areas of arts and crafts to porters, the menial laborers of the auction world. Sotheby's real estate segment employed 110 people. The finance segment had a staff of eight people. In addition, the company counted 221 employees who were not tied to any particular segment.



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span, paula. "the bidding war." washington post, 21 february 1998, c1.

stewart, james b. "bidding war." new yorker, 15 october 2001.

surowiecki, james. "price-fixing for dummies." new yorker, 4 december 2000, 40.

ungoed-thomas, jon, and christopher owen. "sotheby's sold fakes for years." sunday times (london), 5 september 1999.

vogel, carol. "auction houses are set back by conviction in price-fixing." new york times, 7 december 2001, d1.

watson, peter. "a damning catalogue of evidence." observer, 9 february 1997, 5.

——. Sotheby's: The Inside Story. New York: Random House, 1997.

For an annual report:

write: Investor Relations, Sotheby's, 1334 York Avenue, New York, NY 10021

For additional industry research:

Investigate companies by their Standard Industrial Classification Codes, also known as SICs. Sotheby's primary SICs are:

5999 Miscellaneous Retail Stores Not Elsewhere Classified

6719 Offices of Holding Companies

Also investigate companies by their North American Industry Classification System codes, also known as NAICS codes. Sotheby's primary NAICS codes are:

453920 Art Dealers

453998 All Other Miscellaneous Store Retailers (except Tobacco Stores)

551112 Offices of Other Holding Companies