Saatchi Art: The Leader in Online Art Purchasing

The year 2006 marked the beginning of the Saatchi Online website. It was operated by the ever- controversial Saatchi Gallery in London at a time when the gallery was between premises. The London gallery was opened in 1985 when British businessman Charles Saatchi sought to exhibit his own art collection. Mr. Saatchi also exhibited the work of minimalists and pop artists who were relatively unknown in the U.K. at the time. The lengthy list included Jeff Koons, Donald Judd, Roy Lichtenstein and Andy Warhol. He had enough money to purchase entire inventories when he liked the artist’s work. He paid a reported $60,000 for a work by Tracey Emin. At one time, Mr. Saatchi’s net worth was reported as $165 million.

The London gallery had several different homes during its early years. At first, the website started a section where artists could have open access to uploading their profiles and artworks to their personal pages. That year also was the start of Stuart, a new section online devoted to art students, who were welcomed to create their own art home pages. Also, a first-ever exhibition curated by readers was inaugurated with the Guardian newspaper. Mr. Saatchi’s passion for new artworks and devotion to presenting the most interesting and little-known, and often thought-provoking artists created a London art gallery like no other.

Eventually, more than 100,000 artist profiles and 68 million website hits daily ranked Saatchi Online as Number 316 in the top websites of the world, as per the Alexa Top 50,000. It is no surprise that the London gallery advertises its spot as Number 1 museum in the world on social media. The Art Newspaper’s 2016 International Survey of Museum Attendance also ranked Saatchi Gallery as having presented 15 of the 20 most visited London museum exhibitions within the last five years. It is also the only contemporary art museum in the world, of its size, which offers completely free entry. The gallery maintains a partnership with Phillips de Pury & Company, the art auction house, which enables the gallery to provide free entry.

Saatchi Online was expanded as an e-commerce business in 2011 with the goal of promoting emerging artists and contemporary art from around the world. That year, it became a separate company, eventually named Saatchi Art. In 2013, Sean Moriarty was appointed CEO and charged with the responsibility of setting the strategic direction of the gallery. His leadership of the operations was sought to accelerate Saatchi Online’s growth in the global marketplace. In 2014, the first exhibition of Saatchi Art, was held in the London gallery, and then, Chief Curator of Saatchi Art Rebecca Wilson and Saatchi Art transitioned to new headquarters in Los Angeles.

Saatchi Art today, is an art gallery online, designed to provide art exhibition and sales opportunities for artists. The gallery features artists from around the world, includes artwork in all media, curates artworks for buyers, and teaches artists how to sell their work, profit from their creativity and even how to package their original pieces for shipping. It is a comprehensive spot for sellers and buyers to engage in the business of art in a range of prices.

Saatchi Art is one property of Leaf Group Ltd, which is headed by CEO Sean Moriarty and includes the following brands:

Marketplaces

• Saatchi Art
• Society 6 -shopping for premium goods created by global artists
• The Other Art Fair -showcases work handpicked by art industry experts, with fairs in Australia and the U.K.

Content and Media

• Cuteness -viral animal videos, pet tips and tricks, celebrity pets, perfect pet names, pet tips and more
• eHOW -practical solutions for building, creating, fixing and learning
• Leaf.TV -how to videos as a resource for women’s modern lifestyle, covering fashion, eating and life
• Livestrong.com -healthier, stronger and happier living ideas
• Sapling -a site designed to help people who don’t understand personal finance do better
• Techwalla -the place where technology, home and family connect

Leaf Group Ltd. is the new corporate name for Demand Media, Inc. This diversified internet company headquartered in Santa Monica, CA announced its new corporate name and began trading its common stock on the New York Stock Exchange in 2016. It’s New York Stock Exchange ticker symbol is “LFGR”. Saatchi Art is noted as one of its most vibrant creator-driven online marketplaces.

Saatchi Art has grown through the years to include many online services:

For Buyers

• Art Advisory Services and Support
• Art Catalogue and Testimonials
• Curator’s Circle

For Artists

• Art sales, guides, and support

For the Public

• Blog
• Career Opportunities
• An Affiliate Program

The company overview for Saatchi Art, as part of the Leaf Group, in November 2016 included the following information:

Business Model

• A global community of more than 88,000 artists creating original art for sale
• Artists earn 70% of sales, with company using a model based on commission
• Logistics management for packing, shipping, delivery and customs is best in class
• Over 1 million artworks displayed for sale
• More than $1.8 billion in the total retail value of artworks available for sale on the site
• The company has shipped artwork to more than 80 countries

In Q3 of 2016, Saatchi Art’s gross transaction value was $4.3 million. The average order value in Q3 of 2016 was $1,300. The Y/Y revenue growth in Q3 of 2016 was 30%. Together with Society6, Saatchi Art is responsible for 59% of the total revenue of Leaf Group Ltd.

Investor Facts

• Leaf Group began operations in 2006 as Demand Media, Inc. The corporate name was changed to Leaf Group Ltd. in 2016.
• The corporate headquarters are in Santa Monica, California.
• Leaf Group is incorporated in Delaware.
• PricewaterhouseCoopers. LLP are the independent auditors for Leaf Group.
• Investors can invest in Leaf Group buying shares of common stock publicly traded on the New York Stock Exchange.
• Leaf Group does not pay dividends on its common stock and has no intentions to do so in the future.
• Leaf Group does not offer a plan for direct stock purchase.
• The Leaf Group transfer agent for common stock is American Stock Transfer & Trust Company LLC in Seattle, Washington.

When Demand Media Inc. bought Saatchi Art for $17 million, including approximately $5.7 million of cash, the company was considered to be a start-up. Sean Moriarty moved from Saatchi Art to Demand Media and retained his title. He replaced Richard Rosenblatt, co-founder of Demand Media, who had recently resigned.

In November 2016, Saatchi Art released its Invest in Art 2016 report. The focus is on emerging art, and investing in it. The goal of the company is to provide information for collectors and first time buyers to help them make decisions about purchasing artworks online. Online art sales rose about 20% in the 2015 to 2016 period, and the Hiscox Online Art Report for 2016 predicts that online art sales in 2020 will reach nearly $9.58 billion. Saatchi Art’s Invest in Art report features 20 artists who are emerging as outstanding recent graduates who plan to exhibit their work in Saatchi Art showcases. Saatchi Art continues to lead the art world with its internet presence and impact.