04/04/2013 4:12PM

Keeneland April sale: officials anticipate healthy trade in upper market


Keeneland’s select 2-year-olds in training sale April 8 takes place amid optimism—and some evidence—that demand and prices for high-quality juveniles is climbing as the Thoroughbred population declines.

Before the boutique juvenile sale season kicked off at California’s Barretts auction house on March 4, executives for the major sale companies from coast to coast were predicting that returns from their select sales would improve over last year’s results. So far, those forecasts have held true.

The Barretts March average ($143,459) and median ($100,000) shot up 31 percent and 18 percent, respectively. The Ocala Breeders’ Sales Company’s two-day March auction on March 12-13 set sale records for both average ($156,572) and median ($125,000) and sold the highest-priced juvenile this year to date, a $1.8 million Smart Strike-Mini Sermon colt purchased by Stonestreet Stables. The most recent sale, Fasig-Tipton’s Florida sale on March 25, powered up by double digits, too, as average ($385,326) and median ($300,000) rose 20 percent and 32 percent, respectively.

So far, the upper market for 2-year-olds has shown another sunny aspect: a diverse group of buyers.

“I hope the April sale will continue in the same vein,” said Keeneland’s sales director, Geoffrey Russell. “The top of the market is very strong at the moment, and there is great interest in those top-quality horses.”

Keeneland also will hope to buck up from last year’s results, which held steady in average and declined in median. Last year’s auction sold 59 of 161 originally-cataloged juveniles (compared with 70 sold from 2011’s larger catalog of 169) for $9,754,000; the $165,322 average was a shade higher than 2011’s $165,200, but the $120,000 median slipped eight percent. The buyback rate was a stern 38 percent, up from 33 percent the year before.

This year’s select season has gotten off to a strong start, as far as auction houses’ bottom lines are concerned. But it’s not all smooth sailing in the select juvenile sales ring, perhaps the riskiest marketplace for sellers, who must foot the bill while their horses undergo breaking, training, timed public breezes, and veterinary inspections before selling in a market that’s well known for its particularly discerning buyers.

That selectivity and its risk to sellers were on display most recently at Fasig-Tipton: a 41 percent buyback rate and 58 scratches reduced the number sold to 46 from an initial 136-horse catalog. The Barretts March auction’s buyback rate improved this year to 34 percent (from 36 percent in 2012), and consignors scratched 46 juveniles from a 138-horse catalog. The OBS March auction also slightly improved its “reserve not attained” rate, which dropped to 23 percent from last year’s 25 percent, though there were still 108 outs from a 345-horse catalog.

“The problem with the ‘boutique’ sales is that buyers do seem to alight on the same horses,” Russell said. “And if they don’t have enough interest in a horse, the consignor will withdraw the horse. We hope we can get more interest in all the horses at a level where the consignors are happy.”

Keeneland is trying to widen buyers’ perspective when they sort through the April auction’s 137 cataloged juveniles. The catalog’s cover horse, Russell is quick to remind, cost a relatively low select-sale price of $100,000 in 2011. That was Golden Ticket, who dead-heated with Alpha to win the 2012 Travers.

“We’re trying to encourage a wider base of buyers,” said Russell. “Looking back, there are horses we’ve sold that are doing well and even on the Triple Crown trail this year that were in the mid-price range, like Palace Malice ($200,000), Normandy Invasion ($230,000), and What a Name ($350,000), who was a 2-year-old [group stakes winner] in France. These are very good racehorses.”

And Russell noted that the juvenile sales’ aftermarket—private sales of horses who failed to reach their reserves in the auction ring—traditionally has been strong. At last year’s Keeneland April sale, 13 horses originally listed as RNAs were later added to the “sold” list by their consignors, raising the number sold from 59 to 72. The number of private sales, Russell said, might have been higher, as Keeneland published only the private sales that buyers agreed to disclose publicly.

“When people come to a 2-year-old sale and they alight on three horses they want to buy but then don’t get, then they do go find horses that didn’t sell and buy those,” he said.

But in an era of declining foal crops, is the small, boutique juvenile sale too small to remain viable? Russell thinks there’s still a place for the select format.

“The demand for quality horses is still there,” said Russell. “That’s what a boutique sale aims at. So as long as you understand what you’re coming to buy and what’s available to you, then these sales will have a place in the market.”

And they can produce terrific returns for sellers who proffer the right horse into that market—and have everything go right, from the shedrow to the breeze show to the X-rays. Last year’s April sale-topper, a $700,000 Majestic Warrior-Counter Cat colt that Wavertree Stables sold to Stonestreet and George Bolton, cost his sellers just $137,000 as a Fasig-Tipton July yearling.

Keeneland’s 2013 April select 2-year-old sale takes place April 8 at Keeneland’s sale pavilion in Lexington, starting at 4 p.m. Eastern. During the under-tack show held on April 4, Dixie Blossom, a filly by Dixie Union, was the only horse to complete a one-furlong breeze in under ten seconds, clocking in with a final time of :9.80 seconds. The fastest quarter-mile time came courtesy of a colt from the first crop of Irish stallion Thewayyouare, who finished in 21 seconds flat.

To access sales information including an online interactive catalog, click here.