Sotheby's Q3 loss balloons; plans restructuring

(Reuters) - Sotheby's (BID.N), the world's largest publicly traded auction house, posted a 55 percent rise in its quarterly loss, hammered by losses on auction guarantees, and lower private sales commissions and commission margins.

To combat a slowdown in the art market, the auctioneer also announced plans to implement global cost-cutting measures and said it expects to take related restructuring charges in the fourth quarter of this year and the first quarter of 2009.

"Our auctions this autumn were assembled over the summer when the world was a very different place and predictably we are now seeing a softening in a number of markets," Sotheby's Chief Executive Bill Ruprecht, said.

During the quarter, Sotheby's also slashed its guarantee position by 52 percent over last year.

As a multi-year bull market for art sales slows along with the rest of the global economy, auction houses like Sotheby's and privately held archrival Christie's have cut back on the use of guaranteed minimum sales prices, used to attract sellers in the past.

"In this period of considerable economic instability, we will dramatically reduce the guarantees and other special concessions we grant to sellers in order to achieve a more balanced and equitable return for our services," Ruprecht said.

The New York-based company said the decrease in commission margins in the third quarter was largely due to a change in sales mix toward more contemporary art, which typically carry lower margins.

Shares of the company were unchanged in after-hours trade after closing at $8.80 Friday on the New York Stock Exchange.

(Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Anthony Kurian)