Swords will forever be drawn between Hertz and Avis, between Coke and Pepsi and, in the rarefied world of art, between Sotheby's and Christie's. The rival auction houses have been battling for two centuries to corner as much of the art business as they can.
Sotheby's, the bigger of the two, has long come out ahead. But when Sotheby's announced its 1996 sales totals on Thursday, it had lost the lead for the first time since 1954. As both houses raced to expand from their London and New York bases, gentlemanly Christie's, trying harder, perhaps, since Christopher Davidge became chief executive four years ago, had inched ahead.
''The auction business is a monopoly shared by two firms," said Donald B. Marron, chairman of Paine Webber and a passionate collector of art. ''These are two global brand names in a business where everything is growing: the demand, the breadth of the market and the prices. It's an exciting time.''
But every big business has big pitfalls. In London last week, Sotheby's found itself at the center of an embarrassing scandal when the company suspended two employees after a British television show, timed to the publication of a book about the company, reported that two Sotheby's experts in Milan had helped smuggle an $11,000, 18th-century painting out of Italy.
Last night, Sotheby's said it was forming a committee of independent directors to review its practices, adding more fuel to an expose that is the talk of international art circles. With the glamorous aura that now surrounds art auctions, though, sensational allegations can also be advertising.
Sotheby's auction sales totaled $1.599 billion last year, down 5 percent from $1.67 billion in 1995. Christie's sales totaled $1.602 billion, up 9 percent from $1.47 billion in 1995.
Both houses are still posting sales below the records set in the late 80's, before a recession devastated the art market. But as the numbers recover, Sotheby's and Christie's are waging refined war on new continents and in new markets, opening or expanding operations on the West Coast, in Paris and in Asia and aggressively buying up dealers and galleries.
Both increasingly offer their wealthy clients a range of services, from financing and luxury apartment sales to furniture restoration and high-security storage, while also reaching out to popularize the market. They hold evening classes to teach the uninitiated how to bid at auction without feeling intimidated, and they have increased their art education programs.
But in the fight to divide the spoils of the rich and famous, the competition to represent important collections and clients is also intensifying. Sotheby's appears to have won the celebrity sweepstakes in 1996, when thousands of people lined York Avenue to view the contents of Jacqueline Kennedy Onassis's houses and jewelry boxes, making Christie's two-part sale of Rudolf Nureyev memorabilia seem like a minor event.
But Christie's has slowly been creeping up. Although Sotheby's recently secured $15 million worth of German and Austrian Expressionist art from the estate of the art dealer Serge Sabarsky, Christie's is about to announce that it will be selling a third round of property from the heirs of the German businessman and collector Jacques Koerfer. The early modern paintings, valued at about $17 million, include a Rose-period Picasso, a 1929 Mondrian, a Gauguin self-portrait and a Giacometti sculpture.
Still in play are estate property of the conductor Leonard Bernstein, the billionaire Doris Duke, the financier John Loeb and the collector and philanthropist Sally Ganz. Those auctions could tip this year's sales figures in either house's favor.
That the two companies are neck and neck is not surprising. Christie's growth has been slow but steady since 1989, when it had 42 percent of the auction market. But Christie's became more aggressive about buying up companies and getting business with Mr. Davidge's appointment in 1993.
Mr. Davidge, whose father was a porter at Christie's, started out in the company's printing division and worked his way up. Last fall he moved from London to New York, a sign that he wanted to take a hands-on role at the biggest profit center.
In the meantime, Christie's has increased its Asian operations, is opening large premises in Beverly Hills and, like Sotheby's, is expanding its operations in Paris, where European Union rules will allow both London-based houses to hold sales for the first time beginning in 1998.
Though founded in 1774, just two years before Christie's, Sotheby's is quick to call its rival a newcomer to the New York art scene. Sotheby's entered the United States in 1964 with its purchase of Parke-Bernet Galleries, the Madison Avenue auction house. Christie's held its first American sale 13 years later.
Sotheby's experts also like to point out that the company's profits generally run higher than Christie's. Sotheby's 1996 profit was $62.8 million, up 26 percent from $54.3 million in 1995. Financial analysts predict that Christie's will report a 1996 profit of around $50 million, up from $32 million in 1995.
''Yes, I'd like us to be ahead, but it's just as important that the company report healthy profits,'' said Diana D. Brooks, Sotheby's chief executive officer worldwide. ''I'm more concerned with the overall business. We're more than just an auction house.'' Sotheby's also operates a successful real estate firm that just celebrated its 20th anniversary, and since the 1980's has offered clients one-stop shopping for services ranging from financing to furniture restoration.
Sotheby's has also begun forging close ties with dealers, setting aside a large portion of its assets to buy up their businesses. In 1990, Sotheby's and the Manhattan dealer William Acquavella founded Acquavella Modern Art when they bought the contents of the Pierre Matisse Gallery, 2,300 works by artists like Miro, Dubuffet and Chagall. Sotheby's, which invested $142 million, and Mr. Acquavella have been selling off the art at auction and privately.
In June, Sotheby's entered into an agreement with Andre Emmerich, the 57th Street gallery. While Sotheby's doesn't own the inventory, it does own the gallery, which is now Emmerich/Sotheby's, and Mr. Emmerich and his employees are on the Sotheby's payroll.
So is Roger Horchow, the king of the mail-order business, who is working as a consultant. And while Sotheby's won't confirm it, there is talk that it may take over Leslie Hindman Auctioneers in Chicago. Discussions have also taken place between Sotheby's and Butterfield & Butterfield, the San Francisco auctioneers.
Christie's has also done its share of shopping. Four years ago it paid $10.9 million for the London gallery Spink & Sons, which specializes in Oriental art and British paintings and is next door to Christie's on King Street.
In September, Spink bought the Leger Gallery, a Bond Street operation dealing in British paintings, watercolors and drawings, giving Christie's a presence perilously near Sotheby's Bond Street headquarters.
To make itself competitive with Sotheby's in real estate, two years ago Christie's bought Great Estates, the largest network of independent real estate brokers in North American, changing its name to Christie's Great Estates.
''We're all taking advantage of the fact that we are a global business with an international clientele,'' said Patricia G. Hambrecht, Christie's managing director in New York. ''We see ourselves as an art business and we are constantly looking for areas of expansion that are related to the core of our business.''
Both houses are secretive about another important area of growth: their private treaty sales, in which they act very much like the dealers they are buying up, finding a buyer for an artwork without putting it on the block.
Neither Sotheby's nor Christie's will say how big its private treaty sales have become, but officials at both houses admit that in this era of inconspicuous consumption, it is an important part of their business. This fall Christie's even bought a town house on East 59th Street as a separate gallery where experts can show clients art in complete privacy.
Both companies are also about to move to bigger quarters in New York. Sotheby's is working with developers on a plan for the Coliseum site at Columbus Circle that would provide enough space to put all its operations under one roof. Christie's, similarly, is about to move to a 300,000-square-foot complex at Rockefeller Center.
But even with new salesrooms and luxurious offices, the two companies will forever have different images. While Mr. Davidge is successfully bringing a savvy, businesslike image to Christie's and gaining a reputation as a clever deal-maker, their personalities, to many who do business with both houses, are very different.
''The old adage is still true, Christie's are gentlemen trying to be businessmen and Sotheby's are businessmen trying to be gentlemen,'' said Eugene V. Thaw, the collector and retired Manhattan dealer. ''Sotheby's is more hard-driving and tougher and Christie's is more accommodating and softer. Maybe that's part of Sotheby's problem these days: they've chased away their clients.''
The difference in styles may be a result of differences in management teams. Sotheby's top executives all began their careers in the business world. Mrs. Brooks joined the company from Citibank, and Kevin Bousquette, its chief operating officer worldwide, was a limited partner at Kohlberg, Kravis & Roberts. (Henry Kravis, the leveraged buyout king, was just named to Sotheby's board.)
Christie's, on the other hand, is run by people with backgrounds in art. Most of their directors are experts who have worked their way up the auction house ladder.
Sotheby's was primarily a book auctioneer at its founding, while Christie's began by selling fine art and furniture. Christie's remains an English company, but Sotheby's is now throughly American. It's chairman, A. Alfred Taubman, the shopping center magnate, bought the business with a group of investors in 1983 and vastly increased its financial muscle and visibility.
Correction: February 13, 1997, Thursday
An article on Tuesday about the rivalry between Sotheby's and Christie's auction houses understated the 1996 profits reported by Sotheby's. They were $68.2 million, not $62.8 million.
