While the Australian market has recorded high prices and the firm recorded a $5.3 million take from one auction last week, Christie's has struggled as the third player in a high-cost industry where sales can go offshore or onto the internet.
One of the world's most prestigious fine art sales houses, Christie's, is closing down its Australian auction operations, saying it will focus on better opportunities in Asia.
While the Australian market has recorded high prices and the firm recorded a $5.3 million take from one auction last week, Christie's has struggled as the third player in a high-cost industry where sales can go offshore or onto the internet.
Christie's insisted yesterday that competition, heightened by the entry of locally owned Deutscher-Menzies into the market in 1998, was not the reason for the decision.
The managing director of Christie's Australia, Roger McIlroy, yesterday described the decision as "gut-wrenching" but said a strategic review had led to a decision "to reallocate the resources to support areas with increased potential growth in the global market".
Dealers say the business is also suffering because of intensified competition for stock as attics are cleared out. After nearly four decades of operations in Australia siphoning off treasures to their rooms in London and New York, the multinational auction houses are now finding the pickings for transfer overseas slim.
Christie's Australian art turnover was $17.3 million last year against $22.16 million for Deutscher-Menzies, owned by Chris Deutscher and Rodney Menzies of Melbourne, and $33 million for Sotheby's. Income is via a buyers and sellers commission which can total 30 per cent.
Sotheby's latest turnover was buoyed by the $13.3 million sale of the Foster's collection last June, but also included several million dollars from Australian Aboriginal art for which the firm has held specialised sales since the mid 1990s.
Christie's moved to hold sales in this newly booming area of the market only last year, and in another bid to boost its performance took on the expensive lease of the former Edgecliff post office building in Sydney's Eastern Suburbs.
However, the firm achieved many major coups, including the acquisition of the Harold Mertz collection of 1960s art from the University of Texas that grossed $15.94 million in 2000.
It holds the record for Australian art at auction of $2.3 million for Frederick McCubbin's Bush Idyll and also sold the Dallhold (Alan Bond) collection, the BHP Billiton collection, the Coles Myer collection, the John H. Schaeffer collection and the Joseph Brown collection.
In justifying its decision to quit, Christie's says Australia has consistently turned a profit but represents only 1 per cent of the company's global turnover.
The total Australian art auction market, according to the Australian Art Sales Digest was only $93.14 million last year - which is equal to perhaps two seriously important French impressionist paintings.
The move affects 14 full-time staff, as well as contract, part-time and casually employed people in Melbourne; and six similarly employed in Sydney.
Sydney decorative arts specialist Ronan Sulich will head an Australian representative office in Sydney.
A sale of Australian, international and contemporary paintings on April 10 in Melbourne will be the final auction to be held by Christie's in Australia.
Mr McIlroy will be leaving after nearly 30 years with Christie's but will remain with the company until July, after taking the May Hong Kong sales.