Strauss & co - Review 2018

Innovation. Determination. Constancy. Resilience. These few words encapsulate why Strauss & Co can once again report solid earnings. In the trading period January to December 2018 the company achieved combined sales of R254 992 359. It is the company’s second-highest turnover result in a single year of business. Although 22% down on last year’s extraordinary result of R329 000 000, it is nonetheless a robust result that evidences consolidation and long-term upward growth. The result was enabled by solid performances in all the company’s key sectors of business. Headline results are important, but delivering better-than- expected value to sellers on individual lots is the gristle of the auction business. In this regard, Strauss & Co established a number of world records in 2018, notably in the emerging contemporary art segment. There is no sugar coating the fact that 2018 was a difficult year, in many respects. Cape Town faced a water crisis and a sharp decline in tourist numbers. Agriculture production fell by 29.2% in the second quarter of 2018, following an even bigger slump in the first quarter. South Africa officially entered a recession in September after its economy contracted for a second straight quarter. A hesitant recovery is underway. The art auction market was directly impacted by the collapse in late 2017 of the share price of a major public company. The effects were largely played out in 2018. The secondary market was particularly destabilised by private treaty sales of important works; akin to a fire sale, these private sales weakened the market for certain historical artists. This is however a short-term aberration. Hearteningly, if not entirely for the company’s benefit, the South African art auction business is growing. Competition to consign quality pieces is robust. Sellers have greater options. Inventive responses have been called for – and offered by Strauss & Co. The company proved its mettle in 2018. This report surveys key sales and important trends in the trading year, and demonstrates the resilience of Strauss & Co and the South African art market. Moderns deliver consistent performance Despite a broadening of its sales platforms to include eight online sales, open outcry to an interested public remains a cornerstone of Strauss & Co’s business model. The company’s five live auctions generated R233 251 837 in combined sales. The difference between the totals derived from its three sales in Cape Town (R105 788 350) and the two held in Johannesburg (R127 463 487) is negligible. The company’s combined lot sell- through rate of 75.57% in 2018, while down on the previous year, is still well above industry norms for live auctions. Its value sell- through rate of 75.57% is similarly exceptional. Online sales are a growth area. Launched in late 2013, this sales platform yielded R21 740 522 in overall sales and averaged R2 700 000 per timed event. The lot sell-through rate of 61.46% is favourable given the highly competitive and price-conscious nature of this segment. Earlier twentieth-century moderns like Maggie Laubser, JH Pierneef, Alexis Preller and Irma Stern continue to occupy the apex position of the results table. Change is, however, afoot. William Kentridge, still a youthful 63, is the company’s fourth- most valuable artist (R91 851 156 realised from 233 lots sold since 2009). Stern recorded the highest result for a single work sold by Strauss & Co in 2018. Sold for R9 104 000, Dahlias (1947), is a magisterial floral still life depicting a favoured flower. The work was consigned from the prestigious Labia Family Collection. Stern’s gouache Lady of the Harem (1945) sold for R4 096 800, a new world record for a work in this medium by the artist. Strauss & Co Proves its Mettle 12