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Art business: Sotheby's has become reluctant to offer price guarantees on works of art. What does this say about the state of the market?

On 9 May, Sotheby's released their results for the first quarter of this year. The auction house posted a $12.4m loss compared with a profit of $24.3m in the first quarter of 2007 after revenue fell 12% to $129.3m. But it was a detail buried in the results that will have a worrying implication for those with a vested interest in the art market.

Given the seasonal nature of the sales calendar, Sotheby's usually expects to report losses in the first and third quarters--indeed the first quarter has produced a loss for the company in all but two of the past 18 years. This then, was not a clear indicator that the market has turned, as so many people have been predicting. ...

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