eBay Sells Arts Auction House
August 2, 2002
By THE ASSOCIATED PRESS
Filed at 10:40 p.m. ET
SAN JOSE, Calif. (AP) -- In an effort to focus on its core
online auction business, eBay Inc. announced Thursday it
has sold the bricks-and-mortar Butterfields auction house
to the English firm Bonhams.
The financial terms of the deal, signed late Wednesday,
were not disclosed.
EBay originally acquired Butterfields in 1999 for $260
million in stock in an effort to bolster its presence in
the lucrative arts and antiques business.
But eBay's ``offline'' auctions -- which include
Butterfields and Kruse Inc., another real-world business
eBay owns -- have been unprofitable, and contributed just 3
percent of the company's $266 million in revenue in the
most recent quarter.
Butterfields will continue to have a presence on eBay, said
eBay spokesman Kevin Pursglove. Bonhams, founded in 1793,
also is expected to forge a relationship with the online
auction giant.
``Butterfields has certainly helped us in the
marketplace,'' he said. ``But for the long-term growth and
future of Butterfields, we thought it would be best that it
be owned by a (traditional) auction company.''
London-based Bonhams is expected to use Butterfields as an
entry into North America, where it currently has very
little presence, said Geoff Iddison, Butterfields' chief
executive officer.
Iddison, who will oversee the transfer, will remain with
eBay.
``The strategies of the two businesses are going in
different ways,'' he said. ``It makes more sense for
Butterfields to have a more traditional partner going
forward.''
Bonhams will purchase 100 percent of Butterfields' stock
and certain real estate in San Francisco and Los Angeles.
It will do business in the United States under the
Butterfields name.
``With almost 20 separate areas of collecting covered by
Butterfields sales, none of which is duplicated by our
existing operations in North America, our acquisition of
the company gives Bonhams a great base from which to build
our business,'' said Robert Brooks, group chairman of
Bonhams.
One of three surviving Georgian auction houses in London,
privately held Bonhams was founded by antique print dealer
Thomas Dodd and book specialist Walter Bonham.
It expanded in the 1850s to include jewelry, porcelain,
furniture, arms, and fine wines. The present company is the
result of a 2001 merger of Bonham & Brooks with Phillips
Son and Neale UK.
Ebay's acquisition of San Francisco-based Butterfields,
which was founded in 1865, was seen as a way for eBay to
expand into more lucrative deals with customers paying big
prices for antiques and high art.
Though sales of expensive collectibles is growing, eBay
learned buyers of expensive items prefer to learn about
potential purchases in person rather than through a
computer Web browser.
Butterfields' online sales are only about 30 percent of its
business. ``We anticipated a much greater acceptance on the
part of the consumers who buy high-end art and collectibles
in 1999,'' Pursglove said. ``Perhaps we had not entirely
gauged how much of a change in behavior would be required
to make customers comfortable with purchasing high-end art
and collectibles online.''
Since eBay bought Butterfields, the auction house's revenue
has dropped from $31.3 million in 1999 to $25.3 million in
2001.
The move follows several other similar steps by eBay to rid
itself of money-losing operations, including its Japanese
auction site and Billpoint, an online payment provider that
would be phased out if eBay's $1.5 billion acquisition of
PayPal Inc. is approved.
Shares of San Jose-based eBay fell $1.86, or 3.3 percent,
to close at $55.23 in trading Thursday on the Nasdaq Stock
Market, but gained 12 cents in extended trading.
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On the Net:
EBay: ebay.com
Butterfields:
butterfields.com
Bonhams: bonhams.com
Copyright 2002 The New York Times Company |
