Bonhams 1793 Ltd. Business Information, Profile, and History

Company Perspectives:

A dedicated team of specialists, professionals and administrators in each Bonhams location seeks, by commitment to client service and integrity, to establish Bonhams as the prime auction house of choice for buyers and sellers worldwide.

History of Bonhams 1793 Ltd.

Bonhams 1793 Ltd. is one of the world's oldest and the third largest and fastest-growing auction house in the world. Bonhams offers more sales than any of its rivals, through two major salerooms in London: New Bond Street and Knightsbridge, and another ten throughout the United Kingdom, including one in Edinburgh, Scotland. Sales also take place in San Francisco, Los Angeles, New York, and Boston in the United States, and in Switzerland, France, Monaco, and Australia. In addition, Bonhams has a worldwide network of offices and regional representatives offering sales advice and valuation services in 14 countries.

Origins

Little has been published on the history of Bonhams. Thomas Dodd, a renowned antique print dealer, and Walter Bonham, a book specialist, founded Bonhams in London in 1793. At the time, they were just one of several auction houses in Georgian London. The company eventually expanded and by the 1850s Bonhams was handling all categories of antiques, including jewelry, porcelain, furniture, arms and armor, and fine wines. In the 1950s, the Bonham family purchased some land in London's Knightsbridge district and erected a salesroom there, and as the auction house increased its specialties and business another salesroom was opened in Chelsea. By the early 1980s, Bonhams, along with Christie's, Sotheby's, and Phillips, was considered one of England and Europe's "Big Four" auction houses.

After enjoying decades of a solid reputation and profitability, however, by the late 1980s the company's fortunes had experienced a reversal. Many of the auction house's experts had been lured away by Christie's and Sotheby's and therefore its reputation and revenues were slipping. In an effort to turn things around, in 1987 the company brought in Christopher Elwes as its new leader. Elwes, who had earlier helped Christie's set up its highly successful South Kensington showroom, directed Bonhams to focus on its smaller departments and become a specialist in such fields as contemporary ceramics, musical instruments, portrait miniatures, and rock ephemera. "The bigger departments at Sotheby's and Christie's were all looked after," he recalled in a 1997 Management Today article, adding "but smaller ones tended to feel rather neglected. As a smaller company, we could give these areas much more attention." This move provided Bonhams with ownership of the sorts of niches that the bigger players in the auction market had overlooked. One such niche was that of ceramic art. Bonhams established this department in 1988 and by the early 1990s had conducted several major sales of ceramics, including some works by Picasso.

The late 1990s were a difficult time for England's auction houses as they contended with changes initiated by the European Union, specifically a 2.5 percent temporary import tax on all objects brought into the United Kingdom for sale. In addition, the opening of the Paris auction market in the late 1990s took business away from the London auction houses. As these changes occurred in Europe, the United States went from selling almost nothing to having auction sales equal to or exceeding those of the United Kingdom. "Finding foreign buyers is the new buzz word in all the auction houses nowadays," explained Elwes in 1997 in Management Today.

Fortunately, Bonhams--unlike the others in the Big Four, all of which traded overseas--did most of its business in its home country, and thus was relatively insulated from these changes. In 1996, Bonhams sales were around $65 million.

Mid-1990s-2000s: New Markets and Mergers

Much of Bonhams' increase in business was due to its initiation of the first genuinely public auction in Japan, held in downtown Tokyo in early 1996. The commodity sold at this auction was the popular memorabilia of The Beatles, including the Fab Four's velvet capes and Sir Paul McCartney's birth certificate. Bonhams' Tokyo sale was remarkable for its theatricality (It used a satellite link to coordinate bidding between Tokyo and London.), its extensive press coverage, and the excitement it generated. This quality led to "prices that were far higher than we might otherwise have expected them to be," according to Elwes, again in Management Today. Bonhams' next Tokyo auction, devoted to the memorabilia of Elvis Presley, was also a success.

With an emphasis on taking on the big auction houses--Sotheby's and Christie's--Bonhams joined forces with two other smaller houses--Tajan of France and Dorotheum of Austria--in 1997 to hold a successful modern art auction of nearly 300 lots. The following year, an interactive TV auction by Bonhams sold other pop memorabilia, including underwear from an all-girl rock band.

There were risks involved in coming to be known as the fun auction house, as Elwes acknowledged also in Management Today: "Being known as the auctioneers who sold Paul McCartney's birth certificate does not necessarily help you when you're pitching to sell Old Master pictures of 18th-century furniture." Bonhams' pop specialist, an aging 1960s rocker, was not an expert or connoisseur in the traditional sense. Moreover, creating a market for a commodity was a chancier undertaking than dealing in objects that had an established record in the salesroom.

However, Bonhams was not dissuaded from moving in new directions. In 2000, the company merged with another auction house known as Brooks, founded in 1989 by Christie's veteran Robert Brooks. Brooks specialized in the sale of vintage motorcars, and Bonhams had been collaborating with Brooks on a Web site called supergavel. Together, sales at the new Bonhams & Brooks were reported at £75 annually.

In 2001, Bonhams & Brooks merged with the U.K. operations of Phillips, de Pury & Luxombourg, itself a subsidiary of luxury conglomerate LVMH. Acquisition activity continued, and by 2002, the year in which it purchased Butterfields for $21.8 million, Bonhams had replaced competitor Phillips, de Pury & Luxembourg in the number three slot of the Big Four, posting $304 million in auction sales for the year. Bonhams changed Butterfields' name to Bonhams & Butterfields, and Malcolm Barber, formerly of Brooks, became the chief executive officer of the American subsidiary. Bonhams remained the company's brand name outside of the United States.

Butterfields itself had a long and colorful history. The company dated back to 1865, when William Butterfield retired as a sheriff and took up his auctioneer's gavel at Marble Head Auctioneers in San Francisco. At the time, Marble Head catered to Gold Rush Californians and offered mostly surplus goods consigned by sailing ships entering the San Francisco harbor. As the Golden Gate city became more prosperous and sophisticated with the arrival of the Victorian era, there developed a demand for fine art and furnishings. Butterfield, who by now owned the business, adapted his auction house to meet people's need for a place where they could buy and sell their possessions.

Fred R. Butterfield, William Butterfield's son, joined the firm in 1914. Fred's ambition was to place his family's company on a par with the greatest auction houses of London. Immediately following his arrival, there was a great upsurge in the auction market as the nation entered World War I. Fred's son, Reeder Butterfield, joined the business, now called Butterfield & Butterfield, in 1935 and took its helm after his father's death. Reeder developed Butterfield & Butterfield's European and Asian markets by acquiring consigned goods and attracting collectors from outside the United States. Under his direction, Butterfield & Butterfield became one of the strongest auction houses in the world.

Internet auctioneer eBay, in 1999, purchased Butterfield & Butterfield, which had auction showrooms in San Francisco and Los Angeles, for $260 million in stock as part of its ongoing attempts to tap the fine art auction market. Butterfields, as the company came to be known, was supposed to funnel sale items to eBay's Web site in a category known as "Premier." However, the company's revenues fell under eBay's stewardship because shoppers refused to buy high-end paintings, antique furniture, and ceramics online without first seeing them. "I think we had just been slightly off target in understanding the change in consumer buying habits," said a spokesman for eBay in the San Francisco Chronicle, adding "We thought it would happen at a more accelerated pace." Scores of staff were laid off, and Butterfields' entertainment memorabilia, photography, and art deco departments were jettisoned. Live auctions in Butterfields Chicago branch ended in 2000. Nearly 70 percent of Butterfields sales were still offline when it was sold to Bonhams in 2002.

More International Activity in the Early 2000s

In 2003, Bonhams moved further onto the international stage when it joined with Sydney auctioneer Goodmans to create Bonhams & Goodman based in Sydney, Australia. Goodmans, which had been in business since 1994, accounted for about 20 percent of sales in the Australian auction market. At the time, the Australian auction market was still dominated by Sotheby's, Christie's, and Deutscher-Menzies, which together accounted for 75 percent of its sales.

By the end of 2003, Bonhams had grown to encompass more than 800 sales annually, more than 665 employees, and annual sales of $304 million. The company's worldwide network of sales included two major London venues, nine additional U.K. locations, and sales rooms in Switzerland, Monaco, Germany, Los Angeles, San Francisco, and Sydney.

Bonhams & Butterfields conducted its first East Coast sale in 2003 with an auction of Edwin C. Jameson's collection of classic cars and antiques in Massachusetts. Bonhams & Butterfields also developed a strong presence in fine jewelry and Asian art, and strove to become the world leader in ethnographic art. In addition, it had a strong presence in the following markets: arms and armor; American, Western, and California paintings; natural history; modern furniture; and decorative arts markets. Back in the United Kingdom, Bonhams set a world record for sales of British marine paintings by artists Robert Dodd and Thomas Butterworth and for paintings by American artist Aldro T. Hibbard, as well as fetching top dollar for works by Americans Andy Warhol and Roy Lichtenstein.

In 2004, Bonhams & Butterfields, with operations in New York, Los Angeles, and San Francisco, expanded its presence to New York City with the establishment of a permanent salesroom and offices known as Bonhams New York. Its inaugural New York City auction featured 20th century furniture and decorative arts. Bonhams & Butterfields, which specialized in the appraisal and disposition, through auction, of fine art, antiques, collectibles, and decorative objects, also provided consignment management and insurance services.

In 2005, Bonhams New York held auctions in jewelry, 20th-century decorative arts, and American paintings. In an attempt to capture a broader spectrum of buyers, Bonhams & Butterfields took part in San Francisco's South of Market (SoMa) and Los Angeles' Sunset sales. These monthly auctions introduced Bonhams & Butterfields to selling moderately-valued estate property, fine art and furnishings in the $400 to $4,000 range, and opened yet more avenues for profit to the already well-established multinational company.

Bonhams 1793 Ltd. had a ways to go before challenging the likes of Christies and Sotheby's, but it had certainly closed the gap in recent years under the direction of Chairman Robert Brooks. With its Bonhams & Butterfields presence in the United States, and its move into Australia with Bonhams & Goodman, the U.K.-based company was quick to proclaim its role as "not only the world's fastest growing auction house, [but] also the world's oldest and largest auctioneer of fine art and antiques still in British ownership."

Principal Operating Units: Bonhams & Butterfields (United States); Bonhams & Goodman (Australia).

Principal Competitors: Christie's International plc; Phillips, de Pury & Luxembourg; Sotheby's Holdings Inc.

Chronology

• Key Dates:
• 1793: Thomas Dodd and Walter Bonham found Bonhams.
• 1865: William Butterfield founds Marble Head Auctioneers.
• 1987: Elwes takes charge of Bonhams Auctioneers.
• 1999: eBay acquires Butterfields.
• 2000: Bonhams merges with Brooks to become Bonhams & Brooks.
• 2001: Bonhams & Brooks merges with the U.K. operations of Phillips, de Pury & Luxombourg.
• 2001: eBay closes Butterfields' Chicago office.
• 2002: Bonhams purchases Butterfields.
• 2003: Bonhams acquires Goodmans Auctioneers.
• 2004: Bonhams New York opens a permanent salesroom.