Christie's, alarmed by cyber attack, says marquee sale will go ahead

Officials at Christie's auction house said Saturday that marquee sales, which account for about half of its annual revenue, would continue, despite the company losing control of its official website in a hack last Thursday that exposed its extremely Testing the loyalty of wealthy customers. Spring auction.

On Sunday evening, in his first public statement since the cyberattack, Christie's chief executive, Guillaume Ceruti, confirmed that eight auctions this week would go ahead as scheduled, with bidding taking place in person and over the phone (for rare watches The sale has been postponed until May 14). “We look forward to welcoming you to our exhibitions and registering you to participate in these auctions,” he wrote in an emailed statement. Neither Cerruti nor a spokesperson for the auction house responded to questions about how the online portion of the auction would continue.

On Thursday, Christie encountered a “technology security issue” that took her company's website offline, and apologized and promised to provide “further updates to our customers as appropriate.” As of Sunday, the site was still closed.

It was the second time in less than a year that Christie's faced a breach. In August, a German cybersecurity company disclosed a data breach at an auction house that leaked the locations of artworks from some of the world's wealthiest collectors.

Over the weekend, dozens of potential buyers gathered at the company's gallery in Manhattan's Rockefeller Center to view and discuss bidding on the expensive artworks, which have a total estimate of about $840 million. Staff lead private tours of the massive 1964 Andy Warhol “Flowers” silk-screen painting, estimated at $30 million, to a more modestly priced day sale, where an artwork by Barbara Kruger announces That “You Can't Drag Your Money to the Grave with You” had a high estimate of $600,000.

Christie's staff assured some customers at the gallery that its website would be fixed “immediately”, but on Saturday afternoon, when the company still had not regained control, it replaced a temporary landing page on the site with one from Thursday. Created another temporary website. Free web design company called Shorthand. The temporary site lets visitors browse online catalogs of upcoming sales but does not allow online bidding or registration.

Behind the scenes, two auction house employees, who asked not to be identified because they were not authorized to speak publicly, described a state of panic in which top leaders remained silent about the details of the security breach and He did not answer the questions of the employees. Have hackers obtained confidential information about customers and are holding it for ransom?

Several major buyers and sellers also said they were left in the dark about the incident, and were not alerted to the hack until a reporter called.

“This kind of cyberattack is the 21st century equivalent of a grenade in a small room,” said Thomas C. Danziger, an art market attorney who frequently represents clients at auctions. “Twenty-five years ago, it would have been a flood or a hurricane.”

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

“Obviously, it's a nightmare with all the payment and buyer data they have. I have not heard anything from Christie regarding my company's account,” she wrote in an email.

But in the context of the upcoming auction, she said, “I plan to personally participate in the evening sale. “I don’t usually bid online.”

On Saturday afternoon, as collectors were wandering through the galleries, a receptionist said Cerutti was not in the office. Cerutti took the reins of the company in 2016 at a time when auction houses were struggling to find strong assets and inventory to attract new buyers.

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

In March, Kering issued a profit warning that forecast a 10 percent decline in group revenue in the first three months of 2024, with sales of its biggest brand, Gucci, down nearly 20 percent year-on-year in the first quarter. There was a decline of.

Christie's hack also comes amid a leadership change: François Pinault's 26-year-old grandson, François Louis Nicolas Pinault, took the business mogul's seat on the auction house's board earlier this year. Representatives of his family did not immediately respond to a request for comment Saturday.

Two other major auction houses – Sotheby's and Phillips – said they had not experienced any cyberattacks in recent weeks.

Chelsea Binns, a cybercrime expert who teaches at John Jay College of Criminal Justice in Manhattan, said most companies are unprepared for hackers and should prepare by practicing and drafting backup plans.

“But it's just a matter of time,” she said. “There's a little denial about reality.”

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

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