The history of Sotheby’s Auction House begins with Samuel Baker selling books from a catalog in 1734. It was only in 1778, after Baker’s death, that his Nephew John Sotheby joined the firm and founded the auctioneers ‘Messrs Leigh and Sotheby’. Initially the company specialized in rare books: the main passion of both Baker and co- founder George Leigh.
Flourishing Conditions for 18th Century Auction Houses
The eighteenth century provided the perfect social and economic environment for auction houses to flourish. The increase in trade, coupled with the onset of the industrial revolution led to a massive increase in the wealth and population of London.
Conditions for auctioneers became so perfect that after Christie’s was founded in 1766, the other leading British auction houses Phillip’s and Bonhams were both founded in the 1790’s.
Sotheby’s, Bond Street
Samuel Leigh Sotheby
The third and final Sotheby to lead the firm: Samuel Leigh Sotheby, (who was named after his father Samuel Sotheby and George Leigh) extended the firm’s interests beyond Rare Books. In 1819, he held the company’s first sale of autographed work and in 1829, he held four sales of pictures by the romantic painter Richard Parkes Bonington.
Upon his death in 1861, the Sotheby’s dynasty ended (coincidentally as Christie’s had: after three generations). Since then, there have been many key figures who have made Sotheby’s the world class institution it is today.
The history of Sotheby’s Auction House changed dramatically In 1907, when Montague Barlow, a conservative member of parliament, put together a consortium who bought Sotheby’s for the now risible sum of £30,000.
One of the key changes Barlow made to the company was moving the sale room from Wellington Street (near Waterloo) to New Bond Street, where it remains today. He is also credited with hiring the firm’s first female expert Millicent Sowerby: a book specialist in 1916.
He also managed the sale of the property of the poet Robert Browning and Miss Elizabeth Barrett. The sale made a spectacular £28,000 (over $3 million in today’s money) and made a splash in the media. The sale was a prototype for the ‘Jackie Kennedy Onassis’ sale which would take place almost exactly 80 years later for $34.5 million, with buyers paying top dollar for mundane items, just because she had owned them.
Peter Cecil Wilson
The chairman of Sotheby’s who has had perhaps the greatest impact on the firm, is Peter Cecil Wilson.
After joining the firm as a porter in 1936, he became Chairman in 1958 and over the next 22 years, he built the business from a turnover of around $2 million in the late 1930’s to a turnover of $575 million a year. Wilson exploited the new age of jet travel and mass marketing to make the business international.
He also purchased the New York based auction house Parke-Bernet in 1964, positioning Sotheby’s perfectly for the explosion of the American art market in the coming decade and initiated sales in Monte Carlo, Hong Kong, Amsterdam, Munich, Madrid, Melbourne and Geneva.
Wilson sold many key collections, including in 1954, King Farouk’s $2.5 million collection which sold for the Egyptian Government in Cairo. He also initiated the impressionist art collection of Jakob Goldschmidt, the New York investment banker, which achieved huge prices, such as £220,000 for Cezanne’s ”Garcon au Gilet Rouge” (”Boy in a Red Waistcoat,”) : seven times what any painting had achieved at a public auction in England.
Boy in a Red Waistcoat by Paul Cezanne
Sotheby’s as a Publicly Traded Company
Sotheby’s Parke Bernet Group Limited became a publicly traded company in the UK in 1977. It was against this backdrop in 1982/3 that Alfred A. Taubmann and his associates bought Sotheby’s, as his consortium was preferred to another group who were trying to stage a hostile takeover. Taubmann, was an American, who had made a fortune by developing a chain of shopping malls.
When Taubmann bought Sotheby’s, he wanted to use his understanding of consumer behavior and his business acumen to modernize the traditional firm. He remodeled the rabbit warren of buildings that had been knocked together on New Bond Street and made the space work.
He also got rid of many of the old specialists who were from aristocratic backgrounds and there based on connections rather than ability.
Taubmann’s General was Dede Brooks. Brooks was from a good family, and had worked in finance. Her no-nonsense approach to business coupled with her boundless energy immediately made her irresistible to Taubmann, who quickly made her CEO.
An example of Brooks’ business style, was how she managed to sell over 115,000 catalogs from the Onassis sale for over $4 million by getting an intern to report sales back to her hourly while shouting at him.
The Scream by Edward Munch is Sotheby’s highest selling artwork, fetching $127 million in New York, 2012.
Price Fixing Scandal
The pair’s boundless ambition would leave a stamp on the history of Sotheby’s Auction House and ultimately lead to their downfall. In 2002, they were convicted of fixing the commission rate charged with their arch rivals Christie’s. Before the collusion, owners of important collections would often play both houses off each other to drive down their charges, dramatically reducing their profits.
Taubmann decided to meet his opposite number Sir Anthony Tennant to discuss a number of issues. He then suggested Brooks meet the Christie’s CEO Christopher Davidge, to continue discussions.
Though what was agreed is in dispute, some have alleged that Davidge and Brooks went as far as divvying up important collections, to avoid competition. Christie’s came out of the price fixing scandal best off as they claimed immunity from prosecution by shopping Sotheby’s first.
Davidge became the prosecution’s star witness in the case against Sotheby’s and Tennant avoided testifying by refusing to travel to America. Taubmann would be sentenced to a year and a day, while Brooks was sentenced to six months house arrest, 1000 hours community service and a $350,000 fine.
Back to Prosperity
Since the price fixing scandal, both auction houses have flourished. After all, there are only two main auctioneers in the world, and as they were both implicated, neither suffered significantly more than the other.
Sotheby’s now have several new ventures: their own gallery 13S|2, Sotheby’s Diamonds, Sotheby’s wine, Sotheby’s Reality. In 2016 they acquired Orion Analytical a company specializing in the use of forensic science to authenticate art, tackling perhaps the biggest concern the art market faces in the new millennium: authenticity.
Sotheby’s are still innovating and leading the field, after over a century and a half at the top of their game.
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