Christie’s International PLC, founded in 1766, announced late last month the hiring of Steven Murphy, a chief executive who, uncharacteristically, had not gone to Eton. Even more shocking, for the first time in its history, the company will be led by an American.
His nationality aside, the 56-year-old New Yorker was an unlikely choice for the huge, hidebound auctioneer. Mr. Murphy arrives with no experience in the art or luxury-goods industries. From 2002 to 2009–after stints at Disney and EMI Records–he ran Rodale, the privately held publisher of Men’s Health, Prevention and The South Beach Diet Book. Unemployed since his departure from Rodale, Mr. Murphy joins what is now the biggest auction house in the world, with $3.3 billion in sales in 2009. But rumors have been swirling for some time that Christie’s has been on the block, with no takers. Business is down from the art-boom era, and the company recently instituted some unpopular cost cuts.
‘It’s not about cost management,’ said Murphy, ‘it’s about where you put the money.’
In a telephone interview and emails, Mr. Murphy made the case that his hire wasn’t as unusual as it might seem. “I’ve worked in creative businesses most of my career–music, publishing–and have profound respect for the creative process,” plus considerable “experience in managing teams.” As for what he intends to accomplish, he said now was a perfect time for Christie’s to “get our growth strategy right.” A former colleague of Mr. Murphy’s said simply: “He’s a numbers man. It’s all about P&L.”
The executive started the job just as the company began its 2011 budget planning. Christie’s insiders said Mr. Murphy’s charge is not cost cutting per say, but trimming some divisions of the company, even dramatically, in order to fuel an aggressive expansion in Asia. “It’s not about cost-management, it’s about where you put the money. It’s prioritizing,” said Mr. Murphy of his duties. His purview is to grow the business “geographically and technologically.” Chairman Ed Dolman predicted that in the coming years, U.S. revenues will make up a smaller proportion of the company’s profits, and the company’s sales of art online will grow exponentially,
French luxury-goods magnate Francois Pinault bought Christie’s in 1998 through his holding company, Artemis, for $1.2 billion. The rumors about the company’s possible sale hold that Mr. Pinault, a passionate and profligate art collector, has grown tired of his toy. But just a few days before Mr. Murphy’s hire, Mr. Pinault was in Versailles for the opening of Takashi Murakami’s show there, standing right at the artist’s side.
More likely, the 74-year-old Mr. Pinault might be considering peeling off Christie’s as a matter of estate planning: The asset simply isn’t to his son’s tastes. Francois-Henri Pinault, who is the CEO of the family retail chain, PPR–which owns Gucci, among other brands–is not known to share his father’s art-collecting passion. Last year, the younger Mr. Pinault announced he was launching a program to sell the company’s European retail divisions.
Asked if his hiring was a move to pretty up the balance sheet for a buyer, Mr. Murphy responded, “Rumors persist about any successful business.” He added that he’s been in talks with Christie’s for several months, and that during the courtship he met with both of the Pinaults and with the head of Artemis, Patricia Barbizet, to whom he (and former CEO, and now chairman, Mr. Dolman) reports.
Some nickel-and-diming is already under way in the U.S. While the company declines to confirm the figures, it has cut roughly 10 percent of its workforce in the past two to three years, though it retains 53 offices around the world.
In his first week, Mr. Murphy launched something of a hearts-and-minds campaign, meeting with senior executives on both sides of the pond. “At first glance, what is most evident is the high degree of pride and passion this team has for Christie’s,” he effused. He said that “growth and innovation” will come “while preserving a great company’s original intent and culture.”
A former top executive of the company predicted that Mr. Murphy would find the task more difficult than expected, especially when it comes to winning deals for million-dollar properties with guarantees or cash-up-front offers. “You have to take risks that no sane organization would take. Why? Because if you develop the reputation as the house that doesn’t get property, it’s a spiral that feeds on itself.”