Charlotte Burns spies a a telling detail in Sotheby’s financial disclosure. The auction house has gained a foothold in Mainland China with access to Beijing’s new freeport:
Sotheby’s has signed a ten-year agreement with the state-owned Beijing GeHua Art Company on 3 September, investing $1.2m for 80% ownership of the firm. The move “will strategically enhance Sotheby’s long-term presence in mainland China and allow it to potentially capitalise on the opportunities presented by the Chinese art market,” according to Sotheby’s financial report to investors. The agreement means the firm can now operate in Beijing—foreign auction houses are restricted to only doing business in Hong Kong, unless they partner with a domestic firm in the mainland.
Financial analysts have welcomed the agreement and Sotheby’s shares rose to $35.74 after the news broke. Sotheby’s “brings art market gravitas (and a small investment) while Beijing GeHua Art Company brings Chinese market prerequisites,” according to a report published by David Schick, the managing director of Stifel Nicolaus Equity Research. The agreement “shows the power of the Sotheby’s brand—with just $1.2m investment [Sotheby’s] has essentially been invited to partner with a state-owned art venture,” the report adds.
The move will allow Sotheby’s to take advantage of a planned freeport that GeHua is developing within the Tianzhu Free Trade Zone in Beijing.
Sotheby’s Gains Foothold in Mainland China (The Art Newspaper)
