The closure of Stephen Friedman gallery last month underscores that for many in the art trade, staying in business can turn on a pin. Such realities are gleaned from the latest filings of the UK branches of galleries and auction houses on Companies House, the government agency that registers all UK companies. They provide insight into the effects of rising costs and a bearish market on some art businesses in 2024—although it is important to consider that these filings only represent a portion of most international businesses, with a clearer picture often obscured by an offshore parent company.
Precarious finances of galleries
Stephen Friedman was overdue filing when he went into liquidation on 2 February, closing his London gallery immediately (his New York venue shuttered around the same date). At the time of writing, invoices remain unpaid and artists unable to retrieve works from storage companies. In a statement, Friedman says “all matters are now subject to the administrator’s consideration”.
Even in late January, it was thought the business could be salvaged. A statement from the gallery provided to The Art Newspaper on 20 January maintained that, though the 2024 accounts were overdue, they would be published on or before 31 January.
Indicating how a single deal can make or break a business, the statement noted that the late filing was due to “a significant sale” made in mid-December that “had technical implications on the 2024 accounts”. It added: “Given the Christmas break, it was agreed with our auditors that the necessary adjustments would be made and finalised in January.” That filing never came.
Cost crunch
Friedman’s decision to close came after two expensive refurbishment projects; he moved to a bigger gallery on Cork Street, Mayfair in October 2023 and opened in New York’s Tribeca neighbourhood shortly thereafter. The firm’s 2023 accounts reveal that Friedman lost £1.7m that year due to renovation costs and overlapping rents, compounded by “a strong downturn in the industry’s economic market”.
Even so, cash flow projections for 2025 were “positive”, according to the accounts. But, the filings revealed, due to “the slower than usual sell-through of a major exhibition at the end of 2024 and a slow start to 2025, cash flow is currently tight”. The gallery was already then “implementing some immediate cost cutting across the board and discussing refinancing options with our bank”. The 2023 accounts also show the gallery owed almost £11.4m to creditors, due within one year. Meanwhile, Alison Mosheim of the Pentland Group was named as someone with a 25%-50% share in the gallery; Friedman, the sole director of the gallery, owned the rest.
Meanwhile, as of early March, Pace Gallery had also not filed its 2024 accounts, which were due on 31 December 2025, although a £40,000 charge (or loan), created on 29 January, was registered in mid-February. Pace also registered a £30,000 charge in January 2025. It had a three-month extension to file its 2024 figures, with the last 2023 accounts filed in September 2024. “Like most companies, we got very busy at the end of the year,” a spokesperson for Pace told The Art Newspaper in February. “We are finalising our information and will be filing imminently.”
Losers—and some winners
Several of the biggest galleries with bases in the UK reported losses or decreased revenue, with directors citing in their reports geopolitical events and global economic uncertainty as factors contributing to the downturn in sales.
Thaddaeus Ropac Gallery Ltd’s 2024 accounts show a turnover of £36.4m (compared with £49.6m in 2023). Thaddaeus Ropac, the sole director, writes in his report that lower turnover reflected “an increasingly difficult period across the art market as it reacts to current uncertainties around economy, tariffs and socio-political upheavals”. This led to “decreasing gross profit margins and increasing overheads across the industry”, Ropac writes.
The gallery had net assets of £7.9m as of the end of 2024 (2023: £13.2m) and 2024 profits amounted to £1.8m after tax, down from £7m in 2023. A substantial dividend of £7.1m (2023: £9.4m) was paid to shareholders during the year. Bucking the contraction trend, last September, the gallery opened a space in Milan and, in February, announced it will expand to the US for the first time with a project space in New York.
Other galleries to report declines in profit include Hauser & Wirth, whose UK arm saw pre-tax profits plummet by almost 90% in 2024, due to “lower secondary market sales”. The gallery’s parent company and owners are based in Switzerland. At David Zwirner, meanwhile, after-tax profit fell from £2.5m to £41,180, reflecting a decline in turnover, partly mitigated by a lower valuation of unsold stock (£326,000 in 2024 versus £2.5m in 2023).
Moneymakers
Among those to report a rise in profit was White Cube, whose official business name is Modern Collections Ltd. The gallery’s most recent accounts showed a jump in turnover for the year ended 31 March 2025, up from £10.6m in 2023-24 to £15.3m, and profit after tax from £1.6m in 2023-24 to £5.2m.
Like many galleries, White Cube’s businesses are complex. On 30 June 2025, Modern Collections’s immediate parent company, Modern Collections LLP, registered in British Columbia in Canada, was dissolved. The ultimate controlling party remains the same—J.M. Jopling—but the new immediate parent undertaking is Mansmoor Ltd, set up in 2009.
According to the accounts, Modern Collections wrote down the £27.2m cost of its contractual right to sell a designated body of art to the tune of £17.8m, resulting in a net book value of £9.4m as of 31 March 2025. The gallery declined to say whether this body of work relates to a single artist and whether the devaluation is due to some of the work being sold, or to a reduction in its market value. The accounts also show the group holds £53.3m worth of art in stock.
Fair warning for auction houses
The four largest international auction houses have also filed their 2024 UK accounts. All are ultimately owned by offshore parent companies, and their varying structures mean direct comparisons cannot be made. But, judging by the accounts, auctioneering, with its high cost base and squeezed premiums, is not always conspicuously profitable.
Vantage Bidco Ltd, the holding company that owns Bonhams, filed its first set of consolidated accounts for 2024 at the end of December, after it was taken over by one of its lenders, Pemberton Asset Management, via a debt for equity swap in October 2025. The previous owner, the private equity firm Epiris, bought Bonhams in 2018 using a loan from Pemberton.
The Vantage Bidco accounts note that the company owed £207.3m to Pemberton, at a hefty interest rate of 6% above SONIA, the Bank of England’s benchmark interest rate. Pemberton acquired Bonhams—and the network of regional auction houses it acquired rapidly in 2022 (Skinner, Bruun Rasmussen, Bukowskis and Cornette de Saint Cyr)—in lieu of this debt. Epiris was reportedly seeking $1bn for the firm in 2023, according to Bloomberg.
Debt refinancing
As part of the sale to Pemberton, the filings say, the group’s debt facilities were “refinanced and significantly restructured” resulting in a “reduction in gross borrowings and an improvement in the group’s liquidity position”.
The group’s 2024 operating loss stood at £163m by the end of 2024 (£70.8m in 2023), much of that due to impairment (non-cash) losses of £153.3m (2023: £66.4m). Global turnover dipped from £193.4m in 2023 to £176m in 2024. This “reflected the overall decline in the market which ultimately contributed to lower hammer and income” states the directors’ report.
While the accounts give no details as to how much Epiris got out of the deal, they do state that it charged management fees of £150,000 in 2024 (2023: £342,000), with £989,000 of fees outstanding at the end of 2024.
The financial position outlined in the 2024 accounts is now out of date, a Bonhams spokesperson tells The Art Newspaper: “Bonhams secured new ownership in October last year, which brought with it a fresh injection of capital and a new leadership team. The business is in a strong position.”
The Phillips balance sheet
Phillips Assets Ltd is the UK holding company for two wholly owned subsidiaries—Phillips Auctioneers LLC (Phillips LLC) and Phillips Auctioneers Ltd and its subsidiaries (Phillips UK). According to filings, the ultimate parent company is Mercury Group Trading Ltd (MGT), registered in the British Virgin Islands, for which two men—Leonid Fridlyand and Leonid Strunin—are listed as persons with significant control. The pair, who changed their nationalities from Russian to Israeli in 2022, were also founders of the Russian retail group Mercury, though that company has no connection to the Phillips companies.
Phillips Assets Ltd’s aggregate auction sales in 2024 amounted to £381.8m (down from £477.9m in 2023) and private treaty sales to £49.4m (down from £65.6m in 2023). Turnover—fees earned from these sales once money was paid to consignors—decreased by 11% from £99.7m to £89m.
“The process of sourcing these items is highly competitive, which puts pressure on profit margins due to the rivalry among the industry’s leading players,” the directors’ report states. “Financial performance in 2024 took place against the backdrop of a global art market that continued to contract.”
Losses slashed
The group’s overall losses improved significantly from £45m in 2023 to £8.7m in 2024. This was largely due to the revaluation and reduction of amounts owed to other Phillips entities, resulting in a one-off income of £30.1m. Phillips’s Berkeley Square headquarters in London is owned by Berkeley Square Property Ltd (which is in turn owned by Fridlyand and Strunin), to which the auction house pays a rent of £3.7m per year.
“The worldwide economic conditions and the demand for art remain challenging,” the directors write in the report, which states that the group is historically loss-making and reliant upon support from the ultimate beneficial owners, Fridlyand and Strunin. The directors write that they have received written confirmation from MGT that it will continue to provide financial support for at least a year. Should this support be withdrawn, significant doubt would be cast over “the group and company’s ability to continue as a going concern”, the report states.
A spokesperson for Phillips tells The Art Newspaper: “The UK filings represent only a portion of Phillips’s international operations and do not capture the full breadth of our global performance.”
Christie’s doubles down on art financing
Christie’s Manson and Wood, which operates Christie’s UK business, posted a turnover of £132.5m in 2024, up 4% from 2023, and profit after tax of £14.2m, almost double the £7.6m it made in 2023. Total sales were £919.4m, up from £821.9m in 2023 but down from 2022 and 2021 (both just over £1bn).
The accounts also show £60.4m in transfer-pricing income in 2024 (2023: £57.3m), mainly made up of internal charges within the Christie’s group.
Christie’s International PLC, the holding company for all Christie’s companies globally, earned an investment income of £88.1m (2023: £74.8m) from its subsidiaries during 2024 and made a profit after tax of £86m (2023: £72.9m). Its net assets were £345.9m (2023: £301.9m) and £42m in dividends were paid, down significantly from £96m in 2023. The ultimate parent company of Christie’s is Financière Pinault SCA, incorporated in France.
The filings outline Christie’s external financing arrangements, which included $275m Senior Notes (high-priority loans) fully drawn, a £250m revolving bank facility and a $300m debt facility specifically for art financing. At the end of 2024, the revolving bank facility was drawn at £59m and the art financing debt facility at $277m.
“Christie’s Art Financing continues to go from strength to strength, including having secured a new debt facility in an underlying subsidiary during the year to enable further growth and significantly strengthen Christie’s liquidity,” the directors’ report states.
Sotheby’s repositions
As profit margins on auction sales become increasingly squeezed, Sotheby’s is also further positioning itself as a broader finance platform. In January, the auction house announced it had priced a $900m securitisation backed by loans secured against works of art and, for the first time, collectible cars. This is the second issuance under a securitisation programme Sotheby’s launched in 2024 when it priced around $700m in bonds backed solely by art.
Nonetheless, the latest accounts for Sotheby’s Financial Services (SFS) show a £1.4m loss in the UK in 2024. SFS parent company Sotheby’s (Delaware) issued a letter of support, satisfying auditors.
As for Sotheby’s UK auction business, the group’s main trading company in the UK, turnover dropped 24% to £110.6m, while auction sales almost halved from £771.1m to £471.7m. Profits plunged from £22.1m in 2023 to £13.3m in 2024.
A Sotheby’s spokeswoman says that the accounts cited “include financials that are over a year old”. She adds: “We enter 2026 with a strong uptick in our global performance, with consolidated global sales of $7.1bn, an 18% increase vs 2024, significant reduction in debt and significantly improved our profitability and margins.”
Further up the chain, the picture becomes more complicated. Above Sotheby’s is Sotheby’s Holdings, where profit fell 21% year-on-year to $26.8m, mainly because interest income dropped. Equity increased $874.1m to $1.8bn after Sotheby’s Holdings struck a deal with the Sovereign Wealth Fund of Abu Dhabi (ADQ) whereby ADQ, along with Sotheby’s principal shareholder, invested ‘’around’’ $1bn in cash in new shares. The filings show that ADQ owns between 25% and 50% of Sotheby’s Holdings. Dividends of $83.8m were paid to Bidfair—which owns Sotheby’s Holdings—which is in turn owned by Next Alt Sarl, Patrick Drahi’s Luxembourg holding company.
All four major auction houses are ultimately owned by an offshore parent company such as Drahi’s, meaning the true, comprehensive picture of their finances is, in the end, obscured.
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