Editor’s Note
This article details a notable shift in strategy at Phillips auction house, as its recent “New Now” sale saw a significant drop in both sell-through rate and total revenue compared to previous years. This follows a broader trend of softening in the contemporary art market.
Phillips, the auction house known for selling the youngest of young artists, is shifting its strategy. Its recent “New Now” sale on July 13 achieved an 81% sell-through rate, significantly lower than the 94% rate of the previous year. The £3.5 million total was also leaner compared to the £5.3 million and £6.2 million achieved in 2022. This continued the weak performance from the June contemporary art auction.
Phillips has faced financial difficulties for some time, reporting annual losses, including £5.6 million in 2021. The auction house is owned by Russians Leonid Fridlyand and Leonid Strunin, founders of the Russian luxury goods company Mercury Group. As both reside in Monaco and Cyprus, they are not subject to sanctions. Phillips filed its 2021 accounts with the UK’s Companies House only in March 2023. At that time, as reported by “The Guardian,” auditors expressed doubts about the company’s ability to meet its long-term debt obligations. In any case, it remains dependent on guarantees from its owners, placing the house in a precarious situation.
Salvation does not appear to be coming from contemporary art auctions. Instead, the house announced a strategic pivot: future profits are now expected to come from jewelry and watches. Just in May, Benoît Repellin was hired as the new head of the jewelry department. He will operate from Geneva, where Phillips will hold annual jewelry auctions starting in November.
According to the house, the new department recorded a value increase of 185% from spring to autumn 2022. In the press release for the 2023 half-year figures, Phillips CEO Stephen Brooks highlighted the growth in watch sales.
The new priorities and focus on a Swiss location make sense for many reasons. The future of the London location in the city center will be revealed during the autumn season. Currently, the third floor of the building, offering 750 square meters of office space, is being offered for rent through a broker. Price on request.
Alongside the intensified acquisition of watches and jewelry, Phillips is also ramping up its exhibition activities at its London headquarters. For example, new abstract works by Damien Hirst are coming directly from the artist and will be shown with the support of his galleries, Gagosian and White Cube.
A selling exhibition with works by Günther Förg from the collection of Mikael Andersen is also intended to boost business. Furthermore, Phillips has announced an annual editions auction featuring works by David Hockney for the autumn. All these solid artist names are meant to give Phillips the gravitas that its auctions have recently lacked.