News and Events April 1, 2003 admin
Industry News – Phillips to Downscale Operations
Auctioneer Phillips, de Pury & Luxembourg is expected to announce that it is eliminating most regularly scheduled art sales in the U.S., sharply cutting support and administrative staff and severing all ties to its most prominent investor, French luxury-goods billionaire Bernard Arnault.
Simon de Pury, chairman of the company, couldn’t be reached for comment. But under the company’s reorganization, Mr. de Pury and Daniella Luxembourg, the company’s president, will be based largely in Switzerland, where the company’s watch, jewelry and Swiss art sales are held and its own art inventory is stored.
In the U.S., the company’s 57th Street headquarters, off Fifth Avenue, will be vacated and its remaining art experts will be relocated to the firm’s contemporary art gallery and warehouse in the New York neighborhood of Chelsea; many support and administrative positions will be eliminated. Art auctions will continue, though not at regular intervals.
People close to the company cited the high costs of competing with Sotheby’s and Christie’s for property as central to the decision to downscale the firm. While the company’s sales were usually successful, for the first time last year, London’s Bonhams edged out Phillips as the world’s third-largest auctioneer. Phillips closed 2002 with about $180 million in auction sales — Bonhams, traditionally fourth, posted about $304 million.
Phillips first entered the high-end, high-stakes art-auction business in November 1999, amid an unprecedented economic and art-market boom, when it was purchased by Mr. Arnault, head of LVMH Moet Hennessey-Louis Vuitton.
In the months to come, Sotheby’s and Christie’s became crippled financially by a Justice Department probe into price fixing, and Phillips had early success. But ultimately a strategy of buying market share by guaranteeing art sellers minimum prices proved too risky and costly.