In a pricey and powerhouse move, Sotheby’s has acquired art advisory firm Art Agency, Partners, a boutique firm managed by former Christie’s Contemporary art czarina Amy Cappellazzo, for $85 million, the company said today.
The strategic move could go a long way in filling some departmental gaps at Sotheby's, beefing up its private sales division—and annoying rival Christie's, which was, for 13 years, Ms. Cappellazzo’s employer. But the sweeping overhaul of Sotheby’s hierarchy that it portends could also mean upheaval ahead.
The deal provides $50 million in cash and $35 million more provided the new division meets certain revenue goals, which were not disclosed, according to a report from the New York Times.
Ms. Cappellazzo is the second tip-top level hire from rival Christie’s that Sotheby’s has made in recent weeks. Before taking the helm of the two-year-old AAP, Ms. Cappellazzo was the head of Post-war and Contemporary at Christie’s, a huge driver of revenue at the auctioneer. And her hire/acquisition comes on the heels of the defection of Marc Porter, former president of the Americas at Christie’s, who announced in December he was decamping for Sotheby’s.
Ms. Cappellazzo, as well as other AAP brass Allan Schwartzman, a well-established and connected advisor with decades in the business, will begin immediately, reporting to Sotheby’s CEO Tad Smith in New York.
Mr. Schwartzman and Ms. Cappellazzo will hold the titles of chairmen and head a newly formed “fine art division,” which will be focused on “20th and 21st century art,” according to a statement from Sotheby’s. Adam Chinn, also from AAP, will become worldwide head of transaction support.
The hires address some weaknesses in Sotheby’s Contemporary art wing following the departure at year-end 2013 of longtime rainmaker and chief auctioneer Tobias Meyer. But they also seem to create a separate hierarchy in the auction house which could step on some veteran toes.
The new fine art division will encompass Sotheby’s Impressionist, Modern and Contemporary art departments, the Times said. Later, it will grow to include American, Latin American and British art, the paper said.
The major acquisition comes at a time when Sotheby’s has been looking to shed personnel, offering buyouts. The house struggled somewhat to sell the massive (and fully guaranteed) collection of its late former chairman A. Alfred Taubman, and endured some other lackluster sales this season, along with successful ones.
However, a sufficient number of Sotheby’s employees have reportedly taken up the offer of a buyout in November that the firm expects to avoid layoffs.
Sotheby’s stock, which has plummeted nearly 50percent in the last year, is up 1.31 per share on the New York Stock Exchange (Symbol: BID), to $22.98 per share.
“AAP’s profitable business helps drive initiatives that are imperative for Sotheby’s growth—improving our leadership position at the high end of the fine art market, bolstering our private sales capability, giving us new growth opportunities in advisory services and reinforcing the client-first culture in all we do,” Mr. Smith said in a statement. “The AAP leadership team is widely known for its expertise in fine art of the past two centuries, especially in the realm of post-war, contemporary and modern art.”
AAP currently provides art advisement, estate planning and museum development services.
“Ours is an industry poised for change, and the conditions are perfect for a preeminent auction house to transform itself into a premier, client-centric art business,” said Ms. Cappellazzo in the statement.
