Important Announcements from Frank Kilbourn, Strauss & Co Executive Chairperson

2 Feb 2023

We have the privilege of building on the very solid results for 2022, a year in which we held 54 auction sessions, sold 6381 items and generated sales of R354 million.

2023 has kicked off with a bang and January has come and gone in a blur.

February is always a very important month for the Arts in Cape Town with the Investec Cape Town Art Fair drawing artists, galleries, art lovers and collectors from across the world to our shores.

The Strauss & Co team has created a very exciting program for the month of February focusing on art education, business development and curated sales. The program includes the following:

• a non-selling exhibition of key works by Sydney Kumalo and Ezrom Legae in anticipation of the launch of a catalogue raisonné on the work of these world-class artists,
• the launch of the Art Business Conference, the first of its kind to be hosted on the African continent,
•  the launch of our new auction initiative, Curatorial Voices: Modern and Contemporary Art from Africa, a dynamic collaboration between Strauss & Co specialists and seven respected curators from various art hubs across the African continent, and
•  the first of our regular monthly timed-online auctions for 2023.

In an exciting development, we have moved into our new offices at Brickfield in trendy Woodstock. The building is well known to our regular clients and we received very positive feedback on the auctions held at the premises in the last 18 months. Having our own exhibition space at our disposal, will enable us to contribute to the collateral events that make the Investec Cape Town Art Fair such an anticipated annual event.

We strongly believe that the new premises will allow us to streamline our operations and enhance our growth prospects and ability to provide an outstanding service to our clients.

The review held at our executive conference highlighted the need for us to make certain changes to our terms and conditions of business to reflect current market conditions and address new legislative requirements. We would like to bring the following six items to your attention:

1)         New Buyer’s Premium and Seller’s Commission Structure
2)         New Financial Intelligence Centre Act (FICA) Regulation
3)         Domestic Reverse Charge (DRC): Changes on VAT requirements for items containing
            gold or traces thereof

4)         Loadshedding/ Power outages: The way forward

5)         Changes in the Decorative Arts Department

6)         Handling of Unsold Lots

---

1) New Buyer’s Premium and Seller’s Commission Structure
Effective date: 1 February 2023

Since we opened in 2009, our buyer’s premium and seller’s commission have remained the lowest in the market. We intend to keep them as low as possible, but an adjustment is required to take into account the substantial increases in costs we have experienced since 2021.

In making the change, we considered market conditions and the overall desire to simplify and streamline our business processes. To this end, we have introduced a three-tier sliding scale, as detailed below. In order to keep things simple, the buyer’s premium and seller’s commission will be the same across all categories (art, decorative arts, jewellery and wine) and types of auctions handled by Strauss & Co.

PRIVATE BUYERS AND SELLERS  ON LIVE AND ONLINE SALES:

Hammer Price	%
R1 – R250 000	15%
R250 001 – R1000 000	13.50%
R1 000 001 +	12.50%

TRADE BUYERS ON LIVE AND ONLINE SALES:

Hammer Price	%
R1 – R250 000	15%
R250 001 – R1000 000	13.50%
R1 000 001 +	12.50%

TRADE SELLERS:
A flat rate of 10% will be charged
Please note: VAT @ 15% is charged on the seller’s commission and on the buyer’s premium.

---

2) New Financial Intelligence Centre Act (FICA) Regulation
Effective date: 19 December 2022

Following amendments to the Financial Intelligence Centre Act (FICA), we are obliged by law to implement the following:

• for all purchases over R100 000, Strauss & Co is required to submit to the Financial Intelligence Centre (FIC) a significant amount of details on the buyer;
• an adjustment to our systems to capture the required information in order to simplify and automate these submissions to the FIC.

We will keep our clients updated on our progress in this regard and aim to implement these processes in the first half of 2023.

For more information, please refer to the FIC website at this link:
https://www.fic.gov.za/Pages/Home.aspx

---

3) Domestic Reverse Charge (DRC): Changes on VAT requirements for Items containing gold or traces thereof
Effective date: 1 July 2022

Where buyer and seller are both VAT registered and an item is purchased containing gold and traces thereof, there will be additional administrative requirements on both the supplier and recipient of these goods. These instances are rare, but it is important to take note.

For more information, please refer to the SARS website at this link:

https://www.sars.gov.za/types-of-tax/value-added-tax/vat-regulations-on-domestic-reverse-charge-relating-to-valuable-metal/

---

4) Loadshedding/ Power outages: The way forward

Loadshedding and power outages are here to stay until further notice. The impact on our daily lives, on businesses, and on our country is enormous.

Whilst Strauss & Co is set up with efficient generators that kick in within seconds allowing our live virtual auctions to proceed regardless, this may not be the case for all our clients in their private capacity. In addition, Wi-Fi goes down during loadshedding unless one is equipped with an inverter or uninterrupted power supply (UPS). It is extremely frustrating and upsetting to be impeded from pursuing a lot that you would love to own.

We would like to remind our clients that we offer telephone bidding and encourage absentee/commission bids. Please contact us for any assistance required that will ensure that you are able to  participate in our auctions.

---

5) Changes in the Decorative Arts Department

At the end of 2022, Vanessa Phillips, Founder, Director, and Head of the Decorative Arts Department (Furniture, Silver, Jewellery, Glass, Ceramics, Clocks and Watches) at Strauss & Co, retired. She has been an indomitable presence at Strauss & Co since its inception in 2009 and an overall force for good in the auction industry. We thank Vanessa for her immense contribution and will treasure her legacy. Her association with Strauss & Co will, however, continue, as will her presence at important public events in 2023.

The Decorative Arts items for our March flagship sale have already been consigned and catalogued and feature strong decorative arts and jewellery sessions, which we look forward to bringing to market.

We are in the process of refining the Decorative Arts sales calendar for the year and are currently engaged in a recruitment process to secure the necessary skills required.

In the interim, please direct all queries to Susie Goodman susie@straussart.co.za and Bina Genovese bina@straussart.co.za.

---

6) Unsold Lots

I am proud to say that last year we achieved nine white glove sales (auction lingo for a 100% sold rate) in our endeavour to find new homes for as many of the lots we handle as possible. The reality of the market, however, is that unsold lots are inevitable.

If a lot is unsold after the first attempt, we will commit to re-offering it once again on a platform appropriate for the lot in question, at a reduced estimate. If it is unsold a second time, sellers will be required to collect their lot/s within 14 days of the date of the sale. Uncollected lots will be sent to storage at the risk and expense of the seller.

---

Looking ahead to a vibrant 2023

Notwithstanding the macro-economic challenges of the last five years, we have managed to build a solid foundation with the support of our clients, achieving a turnover of over R300 million per annum for 4 of the 5 years in question. Our  commitment to technology and subsequent increase in our online reach has expanded our market and we now have a buying base in 48 countries with an increase of 60 % in new buyers over the last 5 years. We are confident that we will be able to continue to build on this foundation and keep strengthening the market.

Thank you for your support. I look forward to seeing you at Strauss & Co – either in person or online.

Frank Kilbourn
Executive Chairperson