25 September 2003

Collectables: Bonhams' Oz joint venture

A new joint venture aimed at grabbing a slice of the booming fine art auction market may struggle to get into the frame.

Breathless excitement greeted the news that UK firm Bonhams, founded 1793 and the world’s third largest auction house, will dive into the local market via a joint venture with Double Bay auctioneer Tim Goodman. “Our brief is to compete with the multinationals in this market,” said Goodman, targetting the world’s number 1 and 2 gavel bangers: NYSE-listed Sotheby’s and French-owned Christie’s.

Bonhams & Goodman have already opened new offices in Perth and Brisbane and Goodman has recruited no less than five former specialists from “Christoby’s” to kick start the venture.

Both Goodman and Richard Brooks, Bonhams’ UK chairman, cut their teeth in the collectible motor car trade. Goodman’s is already the local market leader in this area and also has a strong profile in jewelry and sports memorabilia. In the UK Bonhams’s strong suit is decorative rather than fine art.

Local skeptics doubt whether this latest foray by an international firm in the super-competitive, and now crowded Australian fine art market, can do much more than nudge the dominance of the “big three”: Sotheby’s, Christie’s, and the Australian-owned Deutscher~Menzies, which entered the market in 1998.

In the late 1990’s French-owned firm Phillips, de Pury & Luxembourg embarked on a similar quest down-under but failed.

Goodman argues that “the oldest firms are losing market share” in Australia, which is true but they have been losing it most spectacularly to D~M, owned by Melbourne cleaning tycoon Rod Menzies. And although the market itself has expanded to the spectacular tune of an average 10 per cent per year, the big three again have carved up the lion’s share.

According to Australian Art Sales Digest data, in 1992 almost $20 million in total sales of fine art was split roughly three ways between Sotheby’s ($6.9 million), Christies ($5.6m), and all “others” ($6.7m). A decade later, in a market now worth almost $80 million, and Sotheby’s ($23.5m) had increased sales four-fold, Christie’s ($18.2m) had more than trebled, D~M ($25m) had exploded in just five years, while “other” ($13.2m) had only doubled.

Goodman's still remains in the “other” category and while its annual "National Art Sale" has grown in 13 years to a respectable $1.75m in sales last July, the Bonhams joint venture will face stiff competition, not least on their home turf in Sydney from Menzies’s other firm, the new look, gung-ho Lawson~Menzies.

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Abridged version published in The Bulletin

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