Goodman managed the Noughties art boom with enthusiasm, firstly teaming up with world auction giant Bonhams in 2003, then bringing venerable Adelaide auction house Bruce's (founded in 1875) into the stable in 2005. Sydney boutique auction Dalia Stanley quickly followed, and in 2008 Bonhams and Goodman acquired Melbourne's 90 year old auction powerhouse Joel's. This latter purchase insulated Goodman to some extent from the notoriously fickle fine art/decorative arts market. Art is discretionary. Fridges and furniture aren't.
There is local amazement that Sotheby's has gone, following Christie's departure in 2006. But although the Australian operations of these companies were profitable, they were tiny in the scheme of things. A single major Picasso sold in London is worth more than all the Christoby's art sold here. Ouch.
Competition has been intense in the small Australian art market, where eight firms battle for limited stock. Further, Sotheby's depends on the London-New York axis, hardest hit by the global financial crisis. In the final analysis, Australia just wasn't worth the bother.
To vacuum up local paintings of interest to Europe, the USA and Asia, Sotheby's will either install a local agent (as Christie's did) or funnel such tasty morsels through Sotheby's-Goodman. Perhaps that is a detail still to be worked out, as the deal is not yet finalised.
What now happens to Bruce's and Joel's? We can expect Bruce's to revert to something like its pre-Bonham's status, contributing stock occasionally to Sotheby's-Goodman. Joel's will probably continue as a stand-alone brand, with its separate website.
The big question is risk. Bonhams have already said they intend to counter Goodman's move by entering the Australian market. Teaming up with a giant worked well for Goodman. Will the giant wreak revenge? Goodman's trump card is the cachet of the Sotheby's name. Playing that card will require skill. Customers rely on the academic expertise of Sotheby's. Sotheby's imprimatur is perceived as a guarantee of authenticity. Authenticity is the Achilles Heel of the art market.
Given that Goodman's absorption of Joel's and Bruce's maintained their brand integrity, one would expect the Sotheby's transfer to be similarly astute. Watch that space.
