Sotheby’s sees an 88% drop in core earnings, says Financial Times report
The financial challenges faced by Sotheby’s have been brought to light in a recent report by the Financial Times, revealing an 88% decrease in core earnings for the auction house in the first half of 2024. This decline is part of a broader art market downturn characterized by reduced sales, layoffs, and gallery closures.
According to the report, Sotheby’s disclosed to its lenders a significant drop in earnings before interest, taxes, depreciation, and amortization (Ebitda) to $18.1 million, even after adjusting for exceptional costs. The auction house is set to receive a major investment from Abu Dhabi’s sovereign wealth fund, ADQ, to help alleviate its financial woes.
The deal with ADQ, expected to be finalized by the end of 2024, will help Sotheby’s address its substantial long-term debt of over $1.8 billion. Despite a 25% decrease in auction sales in the first half of the year, compared to the previous year, Sotheby’s remains committed to reducing leverage and improving its financial outlook.
These challenges faced by Sotheby’s are reflective of wider industry trends, with competitors like Christie’s also experiencing a decline in auction sales. The impact of these financial setbacks extends to Sotheby’s main auction business, with efforts underway to address the company’s total liabilities of $4.3 billion.
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Cillian O’Rourke, studied at the National College of Art and Design in Dublin, Ireland, where he majored in Visual Communication. His work spans graphic design, illustration, and branding, with a distinct minimalist style that emphasizes simplicity and impact. Cillian has collaborated with international brands and runs his own design studio focusing on creative solutions for startups.