Tepid jewelry auctions show wealthy holding back

Fri Nov 21, 2008 1:44pm EST
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By Stephanie Nebehay and Katie Reid

GENEVA/ZURICH (Reuters Life!) - The world's wealthiest people were bidding timidly at Christie's and Sotheby's jewelry sales this week, in a sign the financial crisis has caused even the super-rich to hold back.

While one sapphire ring sold for a record $3.5 million, most of the eye candy languished on the auction block and items that did sell fetched prices 20 percent to 30 percent lower than similar things in previous sales.

"Everyone is suffering and even wealthy individuals are becoming more cautious and are not spending on things that are not 'must-haves'," said Mario Montagnani, a luxury goods analyst with the Zurich-based Chevreux.

"Exclusive items will continue to resist the slowdown well. But it's only very small volumes that are being sold," he said.

Rene Weber of the Swiss bank Vontobel said the unusually sober auctions showed economic jitters have begun to affect the spending and shopping patterns of the very rich.

"There is clearly a correlation between auctions and the luxury market as a whole," Weber said. "If it is a very special item then people are still prepared to pay. But there is a definite decline in demand for average products."

Most of the items sold in Geneva by Sotheby's on Wednesday and at Christie's on Thursday were consigned and valued prior to the onset of financial turmoil that has devastated markets and erased huge amounts of peoples' savings and investments.

The auction houses had urged clients to drop their reserve prices or "secret minimums" for top gems and historic pieces before the sales in light of the economic storm clouds.   Continued...