Editor’s Note: This story originally appeared in On Balance, the ARTnews newsletter about the art market and beyond. Sign up here to receive it every Wednesday. This story is also part of a new series on the convergence of art and luxury. See all of our reporting on the topic here.
Since I started reporting on the convergence of the art and luxury markets last year, I’ve been asking people in the auction game a simple, rational question: What happens if luxury sales overtake art at Christie’s, Sotheby’s, and Phillips? The answer tends to be an emphatic: No, that would never happen. Art is—and always will be—the houses’ bread and butter, I’m usually told.
For now, that holds true. In 2025, Christie’s sold $3.7 billion of art—nearly 60 percent of total revenue. Sotheby’s took in $4.3 billion, also about 60 percent. Phillips only recently revealed that its coffers grew by $927 million in consolidated sales, with $290 million from watches, suggesting that art still accounted for roughly 60 percent of its business.
But the ground is shifting. According to research firm ArtTactic, fine art sales at the Big Three fell 35 percent last year to $7.04 billion, down from a 2022 peak of $10.8 billion. Luxury, by contrast, is booming. Public auction sales for luxury hit $1.84 billion in 2025, up 18 percent year-on-year. Cars are a big driver. Only last month in Paris, Christie’s Gooding—the house acquired car auction house Gooding & Company in 2024—took over €50 million from around 90 car lots. The house’s car sales jumped 14 percent last year against 2024, bringing in more than $234 million, its highest-ever total. While RM Sotheby’s, its dedicated collector‑car arm, surpassed $1 billion in car sales in 2025, also its best year to date.
Cars are just the tip of the luxury boom. At Christie’s, sales for handbags, watches, cars, and jewelry rose roughly 30 percent in 2025, representing nearly a quarter of total sales. And luxury now accounts for a third of Sotheby’s revenue—triple its 2019 share—with private luxury sales up 350 percent year-on-year. Largely thanks to the latter, Sotheby’s has topped $2 billion in consolidated luxury sales for three years running.
If this trajectory continues, the identities and strategies of these houses could soon look very different. Sotheby’s transformation into a luxury retail beast is already underway. At its Abu Dhabi Collectors’ Week in December, the house turned two of the St. Regis Hotel’s restaurants on Saadiyat Island into something like the first floor of a very high-end Macy’s, complete with glass cabinets of handbags, watches, and diamonds for private sale. Paul Redmayne, one of Sotheby’s luxury specialists, even touted the “Sotheby’s Bespoke” service, offering custom-made jewelry. Perhaps more significantly, no art hit the auction block across the week’s five sales. The appetite for luxury in the Middle East is ravenous, and Sotheby’s is hellbent on feeding it.
A Kashmir sapphire that hit the auction block at Christie’s last year.
Courtesy Christie's via Robb Report
Despite this, Guillaume Cerutti, Christie’s former CEO, isn’t convinced that the houses’ diversification will ever constitute redefinition. “I don’t believe that the relatively faster growth of luxury sales compared to fine art is a threat to the identity of the auction houses,” he told ARTnews recently, noting that jewelry and classic cars have long been part of their history. He cited the 2011 sale of Elizabeth Taylor’s jewels as part of “Christie’s legend.”
“Whether fine art or luxury, the fundamentals remain the same: an auctioneer, an object with provenance, bidders in the salesroom, on the phone, or online, and bidding battles,” he went on. “Diversification reinforces the model rather than redefining it.”
Tad Smith, Sotheby’s former president and CEO and Cerutti’s onetime sparring partner, was less sanguine. “An auction house is not defined by revenue mix alone,” he said in an email, “but if capital, talent, and the narrative shift toward luxury sales as first and art second, then the house is no longer being remodeled—it’s scraped and rebuilt.”
Magnus Resch, an art market expert who lectures on art management at Yale University, described Sotheby’s strategy to me as a “structural transformation.” He said that with cross-category integration, prime retail addresses, and potential hospitality ventures, the house is evolving from an art marketplace to a full-fledged luxury platform.
“It reflects a shift from object-centric to client-centric,” he said. “When a billionaire can buy a Rothko, a penthouse, a diamond, and a vintage Ferrari from the same institution, the auction house stops being a marketplace and starts functioning like a private luxury concierge.”
The luxury market in the Middle East is worth $13 billion, according to the Chalhoub Group, a Dubai luxury goods purveyor, and Sotheby’s pulled in $133 million during Collectors’ Week alone. Mark Westgarth, a professor of art market history at the University of Leeds, isn’t surprised the house is “chasing the money” in the region, but even if luxury were to eclipse art, he doesn’t see a dramatic rupture.
“Art has always functioned as a luxury object at the highest level,” he told ARTnews. “It carries status. The art and luxury markets aren’t as binary as we might assume.” Still, he’s skeptical the boom will last. “Luxury is always in flux. What feels desirable now may feel vulgar or outdated in 10 years. We’re in a particular cultural moment—but I don’t see luxury becoming the art market of the future.”
Westgarth suspects luxury may also be a strategic foothold. As Sotheby’s and Christie’s expand in the region—Christie’s launched a Saudi Arabia office in 2024—luxury offers an easier entry into a market where the art ecosystem is still nascent. “Embedding a sustainable art market takes decades,” Westgarth said. “You can’t simply transplant one—it requires long-term cultural foundations.”
At Abu Dhabi Collectors’ Week, as the hammer came down on a hulking, 31.68-carat diamond that sold for $8.8 million, Sotheby’s CEO Charles Stewart told ARTnews that he thought luxury sales could one day surpass art. I was a little surprised, given that most auction execs have trashed the notion when I put it to them. However, he stressed that the two categories complement each other. “Our heritage, DNA, and identity are rooted in fine art,” he said, “but the addressable markets across luxury—cars, watches, spirits, real estate—are far larger than the art market.”
Kimberly Miller, Christie’s new head of luxury, echoed Stewart’s stance. She said luxury categories have been part of Christie’s DNA since the 18th century, when the house held its first major jewelry auction in 1795 with the collection of Madame du Barry.
“Luxury complements, and doesn’t compete with, our identity as an art institution,” she told ARTnews this week. “Christie’s identity has never been tied to category mix alone, but to the principals of connoisseurship and stewardship. Whether we’re offering a bottle of 1961 Petrus or a Rothko Color Field painting, what unites our clients is a shared passion for quality and authenticity.”
Michael Jordan’s 1998 NBA Playoffs “The Last Dance” game-worn jersey sold for just under $1 million at Sotheby’s New York in 2024.
Courtesy Sotheby's
First-time buyers are central to this shift: at Christie’s, 38 percent of new buyers in 2025 made their first purchase in the luxury category rather than the one for art. Many of these purchases were made online. Sotheby’s didn’t publish the correlating figure in isolation, but its 2025 financial report said that 35 percent of new bidders across both art and luxury were first timers. Perhaps they are attracted to Sotheby’s website offering pre-owned luxury items at auction or via “instant purchase,” from real estate, classic cars, and dinosaur fossils to handbags, jewelry, fine wines, and game-worn soccer jerseys.
Tad Smith explained how this is reshaping the auction house client base: “Art collectors are luxury consumers, but most luxury consumers aren’t significant art collectors. Focusing on luxury expands the client base, makes the house more marketing-driven than sales-driven, and changes the culture. Bernard Arnault can sprinkle a Basquiat in Tiffany’s New York, but filling an auction house with that clientele is quite another matter.”
Cerutti added that luxury sales—alongside contemporary art—are now the primary source of new clients at Christie’s.
“The objective isn’t just to attract them, but to encourage exploration of other categories, particularly fine art,” he said. “Many luxury sales take place online, which demystifies auctions and introduces buyers to exhibitions and live sales they might otherwise find intimidating.”
Given that Christie’s, Sotheby’s, and Phillips trade heavily on their cultural authority in fine art, I asked Cerutti if a luxury-led revenue model risks diluting that perception. “A stronger contribution from luxury does not dilute cultural authority,” he said. “It reinforces the houses’ role at the intersection of art, connoisseurship, heritage, and global wealth.”
Smith agreed, but said the houses should expand into the luxury market carefully to maintain their cultural prestige: “ I think [the Big Three] are much too smart to abandon their position in the cultural zeitgeist… and so I would expect them to be judicious and clever in how they add luxury items.”
Jo Vickery, the former head of Sotheby’s Russian department, was more cautious. “The luxury pivot may be very profitable—the real question is at what cost,” she told ARTnews.
