Sotheby’s and Christie’s abandon art for luxury goods as sales plummet

In the United Kingdom, Sotheby's and Christie's, the two largest and oldest auction houses, have been under significant pressure due to declining art sales. According to preliminary figures released in December 2024, both companies reported consecutive annual declines in their sales for the year. Sotheby's estimated a turnover of about $6 billion, a substantial decline of 24% compared to 2023, while Christie's projected aggregate sales fell to $5.7 billion, down 6% from the previous year. Despite notable sales making headlines, including a $6.2 million sale of a duct-taped banana which briefly captured media attention, the overall market for big-ticket art remains in a slump. This downturn in the art market is attributed to decreased both supply and demand for high-value artworks. The last two years have seen fewer eye-catching sales compared to past record-breaking auction events, such as the sale of Leonardo da Vinci's 'Salvator Mundi' for $450.3 million in 2017. Christine Bourron, the chief executive of the London-based art analysis firm Pi-eX, offers insights into the auction houses' challenges, emphasizing the need for innovative strategies to rejuvenate interest in art auctions. She suggests that there is a demand for more engaging experiences for those interested in art. In response to dwindling sales figures, Sotheby's and Christie's are pivoting to selling luxury goods, including handbags, classic cars, and unique experiences. As both organizations grapple with these market challenges, they are exploring new avenues to attract buyers and generate revenue amid the ongoing competitive landscape of luxury goods. This shift indicates a significant change in business strategy from traditional art sales to a broader approach that includes various luxury segments. If the trend continues, the long-term implications could lead to a permanent transformation in how auction houses operate, potentially impacting the core of the art market as they adapt to the evolving preferences of collectors and buyers. This raises vital questions about the future of art as a collectible and investment class and whether the art market can recover from its recent downturn. Auction houses are now tasked with bringing excitement back to their auctions to entice more buyers and revitalize art sales moving into 2025 and beyond.