Sotheby’s Announces Increase to Auction Buyers’ Premium
In a bid to further ramp up profitability amid leadership changes and tight margins, Sotheby’s announced a change to the premium it charges buyers at auction in a filing made with the Securities and Exchange Commission today following the close of financial markets (See “Stock Rises 9 Percent On Departure of Bill Ruprecht“).
Starting on February 1, the new rate structure charged to buyers at auction, on top of the hammer price of a work, will be 25 percent on the first $200,000 of the hammer price; 20 percent on the portion of the hammer price above $200,000 up to and including $3 million; and 12 percent on any remaining amount above $3 million.
“This will improve Sotheby’s revenue, strengthen the Company’s profit margins, fund innovation, help us continue to make interesting and exciting investments in the business, and support our growing online and traditional engagement with clients around the world,” said outgoing president and CEO Bill Ruprecht.
The current rate structure, which has been in effect since March 15 of 2013, is 25 percent on the first $100,000 of hammer price; 20 percent on the portion of hammer price above $100,000 up to and including $2 million; and 12 percent on any remaining amount above $2 million.
So will arch-rival Christie’s follow suit? Both houses have endured major changes this year as the respective CEO’s of both have resigned, though Bill Ruprecht’s departure seems relatively more cordial than that of Christie’s CEO Steven Murphy’s sudden resignation announced in December (See: “Why Was Christie’s CEO Steven Murphy Fired?“).
So will Felix Salmon be updating his invaluable auction calculator widget GAVEL? We hope so! (See: “New GAVEL Calculator Demystifies Auction Prices and Premiums“).
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