High end auction houses suffer and pivot from art to luxury
Global sales of luxury flatlined in 2024 for the first time since 2008 (excluding 2020, during the coronavirus pandemic), according to a recent report by the management consultants Bain & Co. The report’s authors said consumers were prioritizing “experiences over products” in these uncertain times and that the luxury goods market, rather like the art market, is suffering from buyer fatigue.
Big auction houses like Sotheby’s and Christie’s were down for a second year (down 24% and 6% YOY respectively). Sotheby’s has had to lay off 100 of its staff and take a $1B cash-for-equity bailout by Abu Dhabi’s sovereign wealth fund just to stay afloat.
Both supply and demand for bit-ticket art has slumped. Auction houses had been switching from classical art to luxury goods. Sotheby’s has been offering ‘instant purchase’ of luxury real estate, classic cars, dinosaur fossils, game worn jersey’s, wines, etc as a way to attract new buyers and enticing buyers to spend much more on larger auction items later. As Christie’s was saying, “Luxury and art will merge with each other”.
Even that switch to luxury is falling flat. The super-wealthy in the 30-50 age range have shifted to high end experiences over high end possessions. Luxury markets have entering a downward spiral after a decade of growth – especially in Chinese markets where the very rich appear to be pulling back.
Besides art and luxury, they are now experimenting with curated experiences. They worked with Marriott and Alexander McQueen, winners bid on experiencing where McQueen got his start, five-course meal for tour, private visit to Victoria & Albert Museum and personal photo session with Ann Ray (fashion collaborator).
Links: