12/08/2011 12:36PM

Tattersalls proves again that buyer confidence is up

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LEXINGTON, Ky. − With the Eurozone crisis, a credit crunch, and concerns about austerity measures roiling British and European economies, anyone might have expected the recent Thoroughbred breeding stock market at Tattersalls to be tepid. But confidence in the Thoroughbred business overcame doubts about the global economy at the English auction house, where strong gains added evidence that the Thoroughbred market is turning a corner after three difficult − for some, disastrous − years.

Between Nov. 28 and Dec. 1, the Tattersalls breeding stock sale saw gross rise 28 percent, average rise 31 percent, and median rise 24 percent. Newmarket’s bullish performance came on the heels of eye-popping increases at Fasig-Tipton and Keeneland’s November breeding stock sales, as well as record mare and weanling prices at the Goffs November sale in Ireland. Combined, the results reiterated the fundamental points about today’s upper-level breeding stock market: It’s global but select, willing to travel but only for the highest-quality articles.

“It was great to see the resilience of the market at the December sale and in the whole sale season, because it is still tough out there, and not just here in England,” Tattersalls marketing director Jimmy George said. “But quality will always bring out the top breeders, because they know that there are relatively rare opportunities to get their hands on top-level breeding stock. If you’re in it for the long haul, you’ve got to take those opportunities when they come along.”

No auction house likes to see macro-economic instability while it’s trying to sell luxury items such as horses. George credits a smaller supply of horses and a broad international buying group for offsetting fears about the euro crisis roaring just beyond the pavilion doors.

“It was a combination of factors, but primarily, we had a very solid catalog with strong top-end quality to it, which tends to attract the leading players from throughout the world,” George said. “The sales at Tattersalls all autumn have certainly outperformed expectations, and the key throughout has been concentrating more on quality than quantity. Evening up supply and demand was crucial, and that was key to success this year.”

So was buyer diversification. The December sale series overall − including the breeding stock sale as well as yearling and weanling sales − drew buyers from more than 40 countries. George noted that the sale has seen an upswing in Argentine and Chilean buying, as well as from Middle Eastern interests. Kuwaitis Saleh al-Homaizi and Imad al-Sagar paid the breeding stock sale’s third-highest price, about $2.1 million, for Pearling, and buyers from Qatar and Bahrain also have increased activity. George said an Iranian buyer also made some purchases.

“Another factor that was important in the 2011 renewal is the weakness of sterling against a few of the principal currencies,” George said. “Sterling is particularly weak against the yen and Australian dollar, where we traditionally attract a good number of buyers, and perhaps more than ever this year because the buying conditions were so favorable.”

Japan’s Katsumi Yoshida and Australian Paul Fudge provide good examples of how willing up-market buyers are to travel for desirable bloodlines. Yoshida spent nearly $3.5 million for mares at Fasig-Tipton and Keeneland November before buying four mares totaling about $4.5 million at Tattersalls. Fudge’s Waratah Thoroughbreds picked up Fasig-Tipton’s highest-priced weanling, a $450,000 Street Cry half-brother to English Channel, then bought $1.6 million mare Porte Bonheur at Keeneland before spending about $1.5 million at Tattersalls.
American buyers still faced a problematic exchange rate, with a dollar worth just 0.64 of a pound sterling, but that’s better than the two-to-one rate U.S. buyers once faced.

“We have a core of American buyers who attend the December sale on a very regular basis, and those guys were active as usual,” George said, “but it was encouraging to see some new faces.”

This year’s U.S.-based buyers included John Sikura of Hill ’n’ Dale and first-time visitor Greg Goodman, owner of Mt. Brilliant Farm. Sikura bought the Dalakhani mare Darinza, a half-sister to European champion Darjina, for about $1 million; she’s in foal to Coolmore’s top sire, Galileo. Goodman’s three purchases, including the Group 3-placed juvenile filly Gooseberry Fool, totaled $1.85 million. Given how expensive high-end mares were in the States this year, it was worth the trip, Goodman said.

Mt. Brilliant bought $600,000 Quiet Flight from the Ned Evans dispersal at Keeneland November, but Goodman admitted that prices for other fillies and mares he liked at Keeneland − particularly those in the Evans dispersal − were too far past his limit.

“I think people were a little overzealous, and I didn’t get everything I needed,” he said. “Good for Keeneland and good for American racing, but the prices were higher than they were in Europe. I also wanted some exposure to some more international-type pedigrees, even though only one of the mares we bought was a completely European pedigree. I also wanted to buy some mares to breed to some of the stallions over there. Not that I’m not in love with a lot of our stallions here. I just felt it gave us some opportunity.

“Over the last five to 10 years, a lot of great families and great horses have gone to Europe, Japan, and Australia,” he said. “I wanted to own some of those families and bring some of them back here.”

American sellers also contributed significantly to the December breeding stock sale this year. Waratah’s big buy at Tattersalls was Miss Keller, a $1 million purchase who hailed from a familiar American Thoroughbred seller: Three Chimneys. Blythe and Robert Clay’s Midway, Ky., operation topped the opening session with Miss Keller and sold six other fillies and mares. Miss Keller was part of the Three Chimneys Racing partnership’s two-year program. The stable buys turf fillies who are listed winners or listed-placed in Europe, then tries to win Grade 1’s or Grade 2’s in North America before reselling them.

Three Chimneys president Case Clay said Three Chimneys Racing started pointing some grass fillies for Tattersalls after a disappointing return on Diamond Diva, a Dansili graded winner they sold for $400,000 in the U.S. in 2009.

“We thought she would have brought more in Europe,” Clay said. “So now if we think they’ll fit better at Tattersalls, we’ll take them there. You have to take into account the shipping cost [about $10,000] and to think they can net out more because they have a European pedigree and would get a little bit more attention.

“She was worth the gamble,” Clay said of Miss Keller.

Clay called the strength of the Tattersalls December market “surprising” in light of the larger European economic chaos. Tattersalls executive Jimmy George warned the chaos could still take a toll on Thoroughbred markets.

“I think we still have to be cautious and very mindful of numbers,” George said. “The global economy is anything but out of the woods yet, and, in particular, the Eurozone crisis is hanging over all of us. But within that context, I think the Thoroughbred industry has responded incredibly well to the challenges out there. The production levels were at a peak, and they’ve been adjusted as quickly as possible, which leaves the industry in a solid spot going forward.”