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Published: Tue, November 08, 2016
Economy | By Melissa Porter

Sotheby's Names Cheung First Asian Director as Loss Widens

Sotheby's Names Cheung First Asian Director as Loss Widens

During the question-and-answer session, Smith addressed concerns from those who hopped on the call, explaining the value of Art Agency, Partners, discussing the problem with getting consignments despite the emergence of a new collector class that's ready to spend big on works, and looking at the problems facing a business that is technically in retail but can not be, as he put it, "Amazon'd". And, a direct a comparison to last year may be misleading, as the timing of the summer sales in London in 2015 allowed those auctions to be included in last year's third quarter, injecting the earnings period with a $197 million bundle that this year's third quarter did not have. However, by removing the $197m generated by the London Contemporary sales, the decline in net auction sales was 8% on a like-for-like basis.

Smith and Goss emphasized throughout the call that this period's general lack of importance-the year's major auction occur in the second and fourth quarters, when Sotheby's holds its auctions in New York-makes any anecdotal bad news relatively insignificant in the context of the sales calendar. Sotheby's has a global network of 80 offices in 40 countries and is the oldest company listed on the New York Stock Exchange (BID). "They'd like to spend and they'd like to find things to spend it on". He served on the boards of companies including Cathay Pacific Airways Ltd., Hong Kong Telecom and Taikang Insurance Group.

Linus Cheung who has been appointed to Sotheby's board of directors. The charge is related to the "previously announced earn-out arrangements associated with the acquisition", Sotheby's said in a statement. The stock has increased 6 percent in the last 12 months. The Company also reported a lower effective tax rate and a significantly lower number of shares outstanding, both of which will benefit the year, but are negative factors for a quarter in which a loss is reported.

The first and third quarters tend to be seasonally slower for Sotheby's, which holds its main auctions in NY during May and November.

"This sale typically includes higher value works of art, which generate lower commission margins", Sotheby's said in a filing Monday.

Private sales were one of the areas Sotheby's wanted to boost through the acquisition of AAP in January. The firm's 50-day moving average price is $36.66 and its 200-day moving average price is $33.06. "Management expects that substantially all of the $35 million in earn-out compensation will be earned and recognized by the end of 2016".

"Linus brings a wealth of business experience and sophistication to our Board and company", said Domenico De Sole, Chairman of Sotheby's Board of Directors. "Based on the trajectory of the principals' progress against certain targets, we need to take the accounting charge now, although the payouts will still be made over the next four years as planned", said Mike Goss, Sotheby's Chief Financial Officer.

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