Sotheby’s Reveals $15 million Loss on Guarantees–Is that Good or Bad?
Bloomberg (and the NY TImes) cover the news that Sotheby’s revealed a $15 million loss on guarantees in a recent SEC filing. But that loss isn’t greater than last November’s Impressionist sale. And the markets have been far worse recently. Some have noted that Sotheby’s has increased its third-party guarantees by ten fold to more than $60 million while reducing its overall exposure to guarantees. Here’s Bloomberg:
Sotheby’s said that it has outstanding guarantees of $285.5 million, of which $63.3 million was taken on by third parties it didn’t disclose. Chief Executive Officer Bill Ruprecht said in May he will reduce risk by cutting guarantees. Yesterday, the company disclosed that guarantees have fallen 50 percent from a year ago, and that it plans to “continue to substantially reduce its use of auction guarantees until stability is restored in the global economy and financial markets.”