May 21, 2024

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After being hit by a cyberattack, Christie’s says Marche sales will continue

After being hit by a cyberattack, Christie’s says Marche sales will continue

Christie’s auction house officials said on Saturday that the big sales that account for nearly half of its annual revenue will continue, even though the company lost control of its official website last Thursday in a hack that is testing the loyalty of its ultra-wealthy clients amid a financial crisis. Spring Auctions.

On Sunday evening, in his first public statement since the cyberattack, Guillaume Cerruti, Christie’s CEO, confirmed that eight auctions would go ahead as scheduled this week, with bidding taking place in person and by telephone (the rare watch sale has been postponed until May). 14). “We are looking forward to “We welcome you to our showrooms and are registering you to participate in these auctions,” he wrote in an emailed statement. Neither Cerruti nor a spokeswoman for the auction house responded to questions about how the online portion of the auction will proceed.

On Thursday, Christie experienced what it called a “technological security issue” that took the company’s website offline, leaving an apology and promising to provide “further updates to our customers as appropriate.” By Sunday, the site was still down.

This was the second time in less than a year that Christie’s had been subjected to a breach. In August, a German cybersecurity company Detected a data breach At the auction house that leaked the locations of artworks held by some of the world’s richest art collectors.

Over the weekend, dozens of those potential buyers gathered at the company’s galleries at Rockefeller Center in Manhattan to view the expensive works of art, with estimates totaling about $840 million, and to discuss bids. Employees led private tours past Andy Warhol’s giant 1964 silkscreen painting “Flowers,” which carries a high estimate of $30 million, to the more modestly priced daily sales, featuring a Barbara Kruger artwork that says, “You Can’t Withdraw Your Money Out.” “The Money Is With You in the Grave” had a high estimate of $600,000.

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Christie’s staff assured some clients in the showrooms that its website would be fixed “soon,” but on Saturday afternoon, when the company had not yet regained control, it replaced a temporary landing page on the site since Thursday with another temporary website produced by Free website design called Shorthand. The temporary site allows viewers to browse online catalogs for upcoming sales but does not allow online bidding or registration.

Behind the scenes, two auction house employees, who requested anonymity because they were not authorized to speak publicly, described a state of panic as senior leaders remained quiet about details of the security breach and did not answer employees’ questions about whether the hackers had accessed classified information. Turn customers around and hold them for ransom.

Several prominent buyers and sellers also said they did not know about the incident, nor were they alerted to the hack until a reporter called.

Thomas C. said: “A cyberattack like this is the 21st century equivalent of a hand grenade in a small room,” says Art Market Lawyer Danziger, who often represents clients at auctions. “Twenty-five years ago, there would have been a flood or a hurricane.”

Wendy Cromwell, an art consultant, said serious buyers will find ways to engage with the auction house even if it encounters technical difficulties.

“It’s clearly a nightmare, with all the payment and buyer data they have. I haven’t heard from Christie regarding my company account,” she wrote in an email.

But as for upcoming auctions, she said, “I plan to attend the evening sales in person. I don’t usually bid online.”

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Saturday afternoon, a receptionist said, as collectors were wandering the galleries Cerruti was not in the office. Cerruti took the reins of the company in 2016 At a time when auction houses were struggling to find properties and strong inventories to attract new buyers.

The timing of the hack was bad — not just for Christie’s executives, but for the Pineau family, which controls the auction house through Groupe Artémis, a holding company. Artémis also controls Kering, the luxury conglomerate that owns fashion brands such as Gucci and Balenciaga and is run by the billionaire. François-Henri Pinaultwho is also the managing partner of Artemis (along with his father, François Pinault, the family patriarch).

In March, Kering Issue a profit warning Which expects a 10 percent decline in group revenues in the first three months of 2024, with sales of Gucci, its largest brand, falling almost 20 percent year-on-year in the first quarter.

Christie’s breakthrough also occurred in the midst of a leadership transition: François-Louis Nicolas Pinault, the 26-year-old grandson of François Pinault, took the tycoon’s seat on the auction house’s board. Earlier this year. Representatives for his family did not immediately respond to a request for comment on Saturday.

Sotheby’s and Phillips – the other two major auction houses – said they had not been subjected to any cyber attacks in recent weeks.

Chelsea Baines, a cybercrime expert who teaches at John Jay College of Criminal Justice in Manhattan, said most companies are not prepared to confront hackers and should prepare by conducting training and formulating a backup plan.

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“But it’s only a matter of time,” she said. “There is little denial of reality.”

Additional reporting by Julia Halperin and Vanessa Friedman in New York.