LVMH Moët Hennessy Louis Vuitton plans to sell its remaining 27.5% stake in the auction house Phillips de Pury & Luxembourg to the co-chief executives of Phillips, Simon de Pury and Daniella Luxembourg, the auction house said yesterday. Terms of the deal were not disclosed.

In 1999, LVMH bought Phillips, a 203-year-old English house that specialized in middle-market merchandise, with aspirations of transforming it into a high-end business that would rival Sotheby’s and Christie’s. Two years later, Bernard Arnault, LVMH chairman and CEO, merged Phillips with de Pury & Luxembourg, a private art dealership. But a year ago, after analysts estimated that LVMH’s foray into art had cost the company hundreds of millions of dollars, LVMH sold all but 27.5% of its shares of Phillips to de Pury and Luxembourg.

Phillips’s decline has been the subject of much art world speculation over the last two years because its sales totals have been mediocre while guarantees—undisclosed sums promised to sellers regardless of the sale’s outcome—have been hefty, The New York Times reports. Then in November, after a disastrous Impressionist and modern art auction that totaled $7 million, one-seventh of its low $49.3 million estimate, rumors grew that the company would be forced to close.

de Pury and Luxembourg said that they intended to keep the business going, but on a smaller scale, the Times reports.

A total of 50 of the auction house’s 135 employees were laid off, the Times reports. Most of the people who were dismissed, de Pury said, were administrative staff members in the United States and in London. The company also announced that it would move out of its sleek headquarters on West 57th Street in March and consolidate its New York operations at 450 West 15th Street in Chelsea, a space it originally rented to exhibit contemporary art. de Pury said Phillips would conduct its auctions there.

Phillips will no longer hold regular sales of Impressionist and modern art, traditionally the biggest moneymakers in the auction business, although it will still do private sales in that category, the Times reports. It will continue to hold auctions in New York for American paintings, photography, design, watches, and contemporary art. Jewelry sales will take place only in Geneva, and sales of Swiss paintings will be held in Zurich.

JCK