In 2024, Phillips, one of the leading auction houses on the global stage, reported total sales of $843 million. While impressive, auction sales specifically accounted for $721 million, which is a 14% decline compared to the $840.7 million generated in 2023, highlighting a drop from the previous year’s figure. Despite this decline, Phillips continues to maintain a solid foothold in the competitive auction market, with a variety of global dynamics shaping its performance.
Strong Sell-Through Rates Signal Continued Demand
Although Phillips faced a decrease in overall sales revenue, the auction house achieved an 86% sell-through rate by lot across its international locations in New York, London, Geneva, and Hong Kong. This result indicates that the demand for its offerings remains high, with a significant portion of its lots successfully sold. Additionally, 80% of the items offered at auction surpassed their estimated values, suggesting that buyers are willing to pay a premium for the right pieces.
Attracting a Younger Demographic
One of Phillips’ notable achievements in 2024 was its ability to engage a younger audience. As part of an ongoing strategy to tap into the next generation of collectors, 30% of bidders and buyers were aged 40 or younger. Of these, nearly a third were new to Phillips, marking a significant step in the house’s efforts to cater to a digitally-savvy, younger crowd. This demographic shift aligns with Phillips’ emphasis on digital platforms and more accessible price points, both of which have helped foster greater engagement among new buyers.
The Growing Importance of Private Sales
Phillips has increasingly leaned on private sales to supplement its auction revenues, with this sector generating $121 million in 2024. The house has expanded its digital offerings through a newly launched platform that features affordable editions and curated selections from contemporary artists. This platform has proven effective in attracting younger buyers, providing them with more flexible and accessible ways to engage with high-end art and design.
Watches and Jewellery Perform Steadily
While the fine art market saw some softening, Phillips’ watch and jewellery divisions remained stable and lucrative. Watches, in particular, have become a key strength for the house, consistently generating over $200 million each year for the past four years. Jewellery sales also contributed to the house’s continued success, underscoring Phillips’ diversified approach to luxury auctions. The steady performance of these categories has helped cushion the impact of slower art sales.
Competitive Pressures and Margin Challenges
Despite these successes, Phillips faces increasing challenges in the competitive auction market. As demand for high-value works continues to rise, securing top-tier art has become more difficult, placing pressure on Phillips’ ability to meet its profitability goals. High competition among major auction houses for prized artworks has led to reduced margins, making it harder for Phillips to replicate the explosive growth it has seen in previous years.
Ownership Structure and Financial Concerns
Phillips continues to operate under the ownership of Mercury Trading Group, a Russian-based entity. This ownership structure, combined with the house’s historical losses, has raised concerns about its long-term financial health. A 2023 audit revealed that Phillips has historically been loss-making, with competition to acquire high-value artworks contributing to mounting financial pressure. While these challenges persist, the house’s ability to innovate and diversify its offerings suggests a measured response to these complex issues.
Looking Ahead: Navigating an Evolving Market
As Phillips looks ahead to 2025, it faces a dynamic and sometimes volatile market. The house’s ability to adapt to shifting buyer demographics, embrace new digital channels, and maintain its position in luxury sectors such as watches, and jewellery will be key to its continued success. While competition in the auction world remains fierce, Phillips’ strategic focus on attracting younger collectors and diversifying its sales platforms ensures its ongoing relevance in a rapidly changing market.
Written By: Lydia Kelly
Published: 21st January 2025