EBay Inc. announced Thursday it has sold the bricks-and-mortar Butterfields auction house to the English firm Bonhams, the Associated Press reported. The financial terms of the deal, signed late Wednesday, were not disclosed.
EBay originally acquired Butterfields in 1999 for $260 million in stock in an effort to bolster its presence in the lucrative arts and antiques business.
But eBay’s “offline” auctions—which include Butterfields and Kruse Inc., another real-world business eBay owns—have been unprofitable, and contributed just 3% of the company’s $266 million in revenue in the most recent quarter, the AP reported.
Butterfields will continue to have a presence on eBay, eBay spokesman Kevin Pursglove, reportedly said. Bonhams, founded in 1793, also is expected to forge a relationship with the online auction giant.
London-based Bonhams is expected to use Butterfields as an entry into North America, where it currently has very little presence, Geoff Iddison, Butterfields’ CEO told the AP. Iddison, who will oversee the transfer, will remain with eBay.
“The strategies of the two businesses are going in different ways,” he reportedly said. “It makes more sense for Butterfields to have a more traditional partner going forward.”
Under the agreement, Bonhams will purchase all of Butterfields’ stock and certain real estate in San Francisco and Los Angeles, the AP reported. It will do business in the United States under the Butterfields name.
“With almost 20 separate areas of collecting covered by Butterfields sales, none of which is duplicated by our existing operations in North America, our acquisition of the company gives Bonhams a great base from which to build our business,” Robert Brooks, group chairman of Bonhams, reportedly said.
One of three surviving Georgian auction houses in London, privately held Bonhams was founded by antique print dealer Thomas Dodd and book specialist Walter Bonham.
It expanded in the 1850s to include jewelry, porcelain, furniture, arms, and fine wines. The present company is the result of a 2001 merger of Bonham & Brooks with Phillips Son and Neale UK.
Ebay’s acquisition of San Francisco-based Butterfields, which was founded in 1865, was seen as a way for eBay to expand into more lucrative deals with customers paying big prices for antiques and high art.
Though sales of expensive collectibles is growing, eBay learned buyers of expensive items prefer to learn about potential purchases in person rather than through a computer Web browser.
Butterfields’ online sales are only about 30% of its business. “We anticipated a much greater acceptance on the part of the consumers who buy high-end art and collectibles in 1999,” Pursglove reportedly said. “Perhaps we had not entirely gauged how much of a change in behavior would be required to make customers comfortable with purchasing high-end art and collectibles online.”
Since eBay bought Butterfields, the auction house’s revenue has dropped from $31.3 million in 1999 to $25.3 million in 2001.