The Telegraph talks to Robert Brooks, head of Bonhams, the number three auction house and good way behind Christie’s and Sotheby’s. Brooks wants his company to have stronger position in the US but recognizes the pitfalls in that market. Nonetheless, his balance sheet is his calling card and he is pushing it with a campaign to institute trust accounts for clients sale proceeds, something that has bedeviled consignors in Canada:
“There are so many opportunities out there,” he says. “We are in a very positive cash position with no debt on our balance sheet and I feel we ought to be growing.” […]
“The big gap between us and Sotheby’s and Christie’s is in contemporary and impressionist paintings,” he says. “The last dragon that we slay will be the top end of the impressionist market. But we’ll slay a few others along the way.”
One way in which Bonhams is taking the fight to its rivals is by promoting its use of trust accounts.
The auction house decided in 2004 to place all sales proceeds for clients in a trust account, a radical step in an industry where sales proceeds are habitually used to boost cash flows and only returned to clients after a month or more.
“It is important that we focus on the dangers out there,” Brooks says. “When times are tight, sale proceeds become a significant part of many businesses’ cash-flow. In any other industry, that money would be protected, but not in our market. That really is bizarre, it’s 19th century stuff.”