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Recession strategies for commercial art galleries

Tuesday January 13, 2009 | 19:39 by Edward Winkleman in SoHo | permalink

survival-kit-items-latest2Survival has replaced art fairs as the topic dealers discuss most when they meet in New York (how galleries are going to survive, or not, seems to be among the topics most on the minds of critics as well, as evidenced by recent offerings by Charlie Finch and Jerry Saltz to mention but a few). There are, of course, some universal business strategies to a downturn (cut your overhead, advertise more strategically, do more with less, etc.), but some of the responses I’ve heard dealers indicate they’re following are near opposites of each other, reflecting perhaps a personal philosophy about adversity more than any conventional wisdom to the best path to take. The following 4 categories summarize what seem to be the current thinking among the dealers I’ve spoken with in New York about how to respond to this extraordinary economic climate:

1. “Closing” (yes, in quotes)
2. Money shows instead of concept shows
3. No guts, no glory
4. Consolidation

“Closing”
Unquestionably galleries are closing in New York, but very few are reporting that the decision is related to the economy. If the outlook for the market were not so tough, I suspect the percentage of current closings might plausibly seem normal (partnerships do dissolve, dealers do move on to other interests, etc.), but given how U.S. businesses across the board are filing bankruptcy or going belly-up, it’s difficult to imagine financial difficulties haven’t contributed somewhat to the decisions to shutter their spaces.

Still, what’s far more interesting than whether it’s the economy or not are the ideas I’ve heard battered about that use some variation of “closing” as a survival strategy. These seem to fall into one of two modes:

1. Say you’re “moving”: Vacate your space, save on rent, keep your artists, keep your eligibility for art fairs alive, but “take your time” deciding your next location. If it just so happens to take you as long to relocate as it does for the market to rebound, so be it.
2. Take a sabbatical: Close your New York space, but officially “stay open” by taking a sabbatical in a different (read: less expensive) city for a few years (Berlin or Beijing seem high on folks’ lists). This looks daring and adventurous, and permits you to return to New York a more mysterious world traveller.

The overarching advantage to either approach is continuity, clearly. Closing officially makes it all that much harder to rev up your operations, reposition yourself in the food chain (for art fairs or credibility), build confidence among collectors and artists, and so on if, when the market turns up again, you want to be back in the business.

Money shows instead of concept shows
For those galleries staying put, the number one recession strategy seems to be cutting way back on concept shows and (often reluctantly) showing more salable work. This is no skin off the nose for many spaces, obviously, but for a few who spent years positioning themselves as more risk-taking, it can come with a bit of an identity crises. Among the best ways to make this seem less abrupt a change, though, would seem to be to take advantage of the fact that as galleries close (for real or with a wink and a nudge), more artists with established markets become free agents. Adding a “name” to one’s roster provides a bit more cover than adding an emerging artist whose work is more “decorative” (or whatever pejorative you assign to work more salable than the “difficult” work you built your reputation championing) than most other work in your program. The unfortunate downside to this for currently unrepresented artists (regardless of how conceptual or decorative their work may be) is that breaking into any gallery following this strategy will be much more difficult.

No guts, no glory
Then there are those who take the nearly opposite approach. Seeing their neighbors playing it safer, they recognize the opportunity to break through the fog and position themselves as the true risk-taking gallery. This is a longer-term survival strategy, obviously, but when the economy stabilizes, they will have hopefully have earned the attention/respect of the “better” art fair selection committees and museum curators. How to pay the bills during this period is an issue, obviously, but if the collectors are not storming the gates to buy up what you’re showing anyway, the thinking seems to go, you might as well use this period to strengthen your curatorial credibility. What you sell out of the office is between you and those you’re selling it to.

Consolidation
This strategy is the favorite of just about anyone you ask. Anyone but actual art dealers, that is. A very influential young dealer I spoke to about this at Art Basel Miami Beach nailed why this isn’t gaining traction among the struggling spaces, saying “The truth of the matter is, most dealers can’t stand each other.” Yet, business minds from nearly every other field point to consolidation as the inevitable means to keeping the industry afloat. How this might work has been discussed in articles and blogs (including by yours truly) a great deal recently, but personally, I still have yet to see a model I find attractive. The highly individual nature of most galleries fuels the stubborn resistance to the idea. Pundits like to point to the partnership of Boone and Werner when suggesting this is simply a mature response to an economic reality. The implication seems to me to be that when the market gets stronger again, it’s simple enough for each to carry on their merry way. Most partnerships I’ve witnessed end, though, suggest it’s anything but simple or pleasant.

As Barack Obama keeps demonstrating, however, success does seem to come from listening to a wide range of informed opinions and them choosing wisely. So with that, I will note, as a dealer in Chelsea, that I would very much appreciate any feedback or advice on how best to navigate the current economic situation (but keep in mind, I’ve already called Mary Boone and she’s not interested in teaming up…just kidding).

Filed Under: Chelsea, Galleries, Marketing
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2 Responses

  1. 1. András Szántó Says:

    Good of you, Ed, for laying out some options for art dealers in the downturn. The reluctance to merge and collaborate remains, in my mind, the most interesting part of the puzzle.

    Galleries are curiously similar to non-profits in this respect. “Stay independent no matter what” is the credo of many art managers, even if it means reducing the quality of your services and the level of care and commitment you can put behind promoting your artists.

    The assessment that this is largely because dealers can’t stand each other is candid, but insufficient. I don’t think there was a love-fest when Bank of America absorbed Merrill Lynch. Yet the deal happened quickly. Why? Because in a grownup industry, survival trumps personal feelings.

    The lamentable fact is that many galleries would sooner close than contemplate collaboration. Independence may be romantic, but it’s not always a good strategy for survival.

    In my view, this is a huge missed opportunity, not only for individual galleries, which may strengthen their positions by teaming up, but also for the gallery sector, which is too splintered, diffuse, and individually weak to compete against larger entities with deeper pockets. If you think about it, much of what has happened in the art market in recent years has been a story of savvy large corporate players exploiting the competitive weakness of mom-and-pop galleries.

    And there are many ways of teaming up short of a full-blown merger, from back-office partnerships to joint promotions of artists to shared production deals and joint publications programs.

    The dealer as auteur surely cherishes his independence. The dealer as businessman may think otherwise.


  2. 2. Edward Winkleman Says:

    Collaboration is not so daunting a prospect to most galleries I know, András. From NADA and its fair, to the impressive way dealers rally to help fellow dealers in need, to our own joint publishing venture with our neighbors Schroeder Romero (shameless plug), collaboration is something you see plenty of.

    Merging on the other hand is antithetical to why many galleries started in the first place. Rarely is it solely a business decision (there are much, much easier ways to make money). Generally it’s a passion combined with a point of view, and then a business (for all but a few, I’d say this is the case). Those dealers lucky enough to work with a business partner who shares their vision can attest to how tricky that can be at times. Imagine those same partnership issues being worked out between dealers with different agendas. Furthermore, the ultimate goal of any business is to make a profit, clearly, but the difference between how a gallery does that versus how Bank of America does that is tied to all of art history. No small matter. Romantic or not, it’s why dealers open spaces.


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