Sotheby’s CEO Philip White (Credit: Sotheby’s)
Sotheby’s International Realty — which for years ran its franchise and company-owned businesses separately — is bringing the two operations under one (corporate) roof.
The Realogy-owned brokerage billed the integration as a strategic business decision that will help the company realize economies of scale, invest further in marketing and technology, and claim more global market share.
Philip White — who has been president and CEO of the Sotheby’s franchise business for five years — will lead the combined business as chief executive. Kathy Korte, who ran the New York-based company-owned operation, will transition into an advisory role, the company said.
“It’s about strategic growth; having our two teams aligned gives us a sharper focus on the market,” White said.
Sotheby’s International Realty was formed in 1976 as a marketing and referral program for auction house clients. White said for years the franchise and company-owned businesses were run as a single operation; it wasn’t until 2004 that they were split. At that point, Realogy licensed the Sotheby’s name for its franchise system and for 43 company-owned brokerage offices in key cities including New York, Los Angeles, Palm Beach and others.
“This is getting back to our legacy,” he said. “It’s about creating more synergies between our two companies.”
Globally, Sotheby’s has 22,500 agents in 990 offices in 72 countries. In 2018, Sotheby’s franchise and company-owned offices sold a combined $112 billion worth of luxury homes — a record sum that bested 2017’s $108 billion. In the U.S., sales rose from $96 billion to more than $100 billion; international sales were flat at $12 billion.
White stressed that the move is not a cost-cutting measure and said Sotheby’s is investing in the marketing and tech space. The company plans to roll out an integrated website this year that will feature listings from all of its offices, and will look at opportunities to open additional company-owned offices.
“Having our two teams aligned gives us a sharper focus on the market,” he said. “It allows us to get even closer to the business and agents so we can build tools and systems to help them grow their businesses.”
In Manhattan, Sotheby’s International Realty — with 286 agents — was No. 6 on The Real Deal‘s recent ranking of top brokerage firms. It logged $1.24 billion worth of closed deals in 2018, according to TRD‘s analysis. The company-owned firm is moving the headquarters for its New York-based operation to a 38,000-square-foot space at 650 Madison Avenue. That’s roughly 30 percent more space than it currently has at 38 East 61st Street.