The hard sell

For all the billion-dollar turnovers and glamorous, high-profile sales in New York, London, Hong Kong and Paris, the top level of fine-art auctioneering is a notoriously high-overhead, low-profit business. At times, it is even a no-profit business (Sotheby’s made a loss last year). How the Big Two auction houses have grappled to respond to this uncomfortable fact has shaped recent saleroom history.

First came collusion and price-fixing, which resulted in damaging — in every sense of the word — antitrust litigation in the US, and then brave but initially unsuccessful attempts to harness the internet revolution, with sothebys.com. Most recently, the duopoly’s response to the profit problem has been to use the specialist skills of their employees to develop complementary non-auction business. The first steps towards diversification were, of course, made way before any whiff of scandal, with the creation of Sotheby’s Institute of Art in 1969 and Christie’s Education in 1978. So rapidly has this process accelerated in recent years, however, that the two companies are now almost unrecognisable.

From international fine-art auctioneers they have transformed themselves into multifaceted global luxury goods and finance companies. As one chairman of another — there is no rival — auction house said to me recently, Sotheby’s and Christie’s offer better wealth-management services than most wealth managers. Certainly these new, bespoke, highly professional services cater to the high net-worth individual. Not least, those from the ‘I want it now’ generation.

It seems as though there is nothing the Big Two cannot help you buy. They can find you a fabulous home — and a second or third one, too. After acquiring a metropolitan penthouse or townhouse, you could indulge in an historic mansion, a private island, a ranch. If you care for golf, there is Porcupine Creek, a 249-acre estate boasting one of the best golf courses in California (Christie’s Great Estates, $75 million).