IT’S hard to believe that only nine months ago art dealers everywhere were still dreaming up plans for vast multinational expansions. Since September, however, the contemporary art market has careened from boom to bust. Nowhere has that reversal of fortune been more sharply felt than in New York, whose galleries represent the full spectrum of the art world’s pecking order.
Some two dozen galleries here have folded. The most notable among them — Clementine, Guild & Greyshkul, Roebling Hall and Rivington Arms — are midsize galleries, where the reputations of up-and-coming artists first gain traction.
Aside from slashing prices or deepening discounts, art dealers across the city have been coping not just by laying off employees but by dropping artists with poor sales records, creating partnerships with other galleries and reaching out in desperation to tried-and-true customers, many of whom were priced out of the market during its peak. Still, with the exception of several blue-chip galleries who show well-known artists, foot traffic in Chelsea and other gallery precincts has thinned markedly where crowds jostled just a year ago.
Now, on the heels of the annual Art Basel fair in Switzerland, dealers are bracing for the notoriously quiet summer months. “Art galleries typically bring in very little revenue from mid-June to October,” said Josh Baer, founder of the art industry newsletter Baer Faxt, “which is already pretty tough on the cash flow. But when business is off 50 to 80 percent, one wonders how many galleries will reopen in September.”
The most recent casualty, the Charles Cowles Gallery, set to close before the end of the month, will leave a gaping storefront on West 24th Street, the heart of the Chelsea gallery district. After 30 years of selling art, Mr. Cowles said in a recent interview, he was ready to retire. But the economic slide left little room for hesitation. “It’s shocking how bad business has been,” he said. During the big New York auctions last month, he said, “I didn’t see a single major collector in the gallery.”
Also absent in Manhattan these days are the young Wall Street executives who in flusher times routinely dropped the occasional $10,000 on an artwork. Now it’s the wealthiest collectors who are calling the shots. And while they continue to buy, albeit more slowly, they’ve been taking far fewer risks, favoring bigger galleries, like Gagosian and David Zwirner, whose menu of services ranges from discreet backroom sales to name-brand artists with a long history of museum shows and works in prestigious collections.
“What’s going on with the collectors,” said Roland Augustine, co-owner of the Luhring Augustine Gallery in Chelsea and president of the Art Dealers Association of America, “is that there’s far more selectivity in the buying at all levels.”
The tougher times have led many dealers to cancel expensive installations and fat, splashy catalogs, keep exhibits running longer, ask artists to cover their own production costs and drastically limit their participation in art fairs, once considered a boon to business. Although the downturn affects everybody, some younger dealers have responded by promoting low-priced artworks and forging collaborative relationships with fellow dealers.
At Schroeder Romero on West 27th Street, for example, Sara Jo Romero said that Compound Editions, a joint venture founded last fall with the neighboring Winkleman Gallery, offers artworks produced in multiples in the $100 to $300 price range. “That’s been a big success for us,” Ms. Romero said. “Also we don’t have any employees, and our space is off the beaten track,” she added, which helps to minimize her gallery’s costs.
Tracy Williams, whose gallery is in the West Village, is also focusing on lower-priced art. Seeing her bottom line plummet in December, Ms. Williams said, she asked a consultant to take a look at her books. After being told, “This is what you did last year, this is what you’re going to do next year, this where you have to cut back,” she said, she let go one of two full-time employees.
She asked her artists to begin covering their own production costs. Then she asked three young curators to recommend emerging artists whose work she could sell — ideally — for less than $2,000. Her goal, she said, was “to show inexpensive work by younger artists” that would sell and draw attention to the gallery. (The exhibition, “Tactical Support: Curator’s Choice,” is open through July 31.)
Cutbacks and bargains on the home front have been accompanied by a vastly reduced presence at foreign art fairs for many dealers.
Referring to her 18-square-foot booth at Art Basel, Ms. Williams said, “It’s $40,000 before anything’s even hanging on the walls.” On top of standard expenses like airplane tickets, hotel rooms and meals for four or five days, “you have to pay for all of the light bulbs,” she said. “You pay for every outlet. And that’s before you even think about framing and transporting the art, or the building of an extra partition.”
Ms. Williams said she has eliminated all plans to attend art fairs for the remainder of this year.
Brent Sikkema, co-owner of the Sikkema Jenkins gallery in Chelsea, said bidding farewell to art fairs has been easy. He participated in five fairs last year. “We’ll never do that again,” he said.
“On the positive side,” he added, “art fairs have contributed enormously to the globalization of art. But on the negative side they spawned a culture of shoppers,” typically newcomers who rarely visit galleries.
“I’ve said for years, the shoppers will be the first to head for the hills when the market softens,” he said. “That has absolutely been the case.”
If business is far quieter than a year ago, Mr. Augustine, for one, said he takes solace in collectors’ renewed focus on gallery programming, as opposed to faddish speculative buying.
In March, he said, Luhring Augustine mounted the first solo show of the British artist David Musgrave, whose meditative monochromatic drawings and sculptures were priced from $5,000 to $18,000. Everything sold, according to Mr. Augustine: “Did we make a huge whopping profit or cover our expenses for years to come? No, we did not. But we created a market.”
More recently, he added, the gallery’s eighth show of work by Albert Oehlen sold a single picture for a substantial sum, $375,000, suggesting to Mr. Augustine that “it’s not a complete desert out there.”
Desert or not Mr. Zwirner appears to have found an oasis at the high end of the market. Yes, he’s working six-day weeks, he said in a recent interview. Yes, he has to negotiate arduously to find the perfect collector for very choice pieces of art. But after a dry period of about nine months, he said, “collectors have been stepping back in, both as buyers and sellers.”
“The last auction cycle ended the slide,” he said. “It really felt for me as if a floor were appearing under our prices.”
Mr. Zwirner attributed this shift, in part, to clients who are frantically raising cash and negotiating deals privately. “I don’t think anybody was bringing any significant work to the auctions,” he said. “In this, galleries are really strengthened right now.”
That said, he added: “Collectors are very price conscious. And it is a process.”
In this economy, “you need two strong legs to stand on,” he said. “You need a secondary market with a proven track record that’s really focused.” (Mr. Zwirner’s secondary sales cater mostly to Minimalist and Expressionist tastes.) “And you need artists accepted by the canon of art history.”
“If you can’t define yourself right now,” he said, “you’re going to get swallowed up, because the ones who do define themselves are going to take all of the business.”
One could argue that the Chelsea dealer Zach Feuer has defined himself through the painter Dana Schutz, whose work continues to woo institutions and collectors.
But for dealers representing artists who have yet to achieve big success, the recession has swung like a wrecking ball. And as Mr. Baer noted, dealers once raking in $100 million in sales whose business is now down 75 percent are still in far better shape than those once making $1 million, who are now down to $200,000. With half of a dealer’s profits typically going to the artist, he said, “that doesn’t give much room to run a business.”
As if to prove Mr. Baer’s point, on a recent Saturday at the Bellwether Gallery in Chelsea the owner, Becky Smith, stared at the screen of a laptop, her aging Chihuahua mix splayed at her feet. With the bulk of her income generated by five major collectors whose purchases have all but dried up in recent months, Ms. Smith said her current revenues are a mere 20 percent of what they were at the height of the market. She’s laid off all of her employees. She’s renegotiated her rent.
“I’ve gone at my overhead with a machete,” she said. Referring to other galleries she considers peers that have already closed, she said, with a wan smile, “I’m kind of in the perfect sweet spot of misery.
“I might not be open at the end of the summer,” she acknowledged, “and it makes me mad.”
“I bet a lot of great galleries won’t be opening in the fall,” she added, noting that without them a whole generation of voices would be silenced. On Wednesday, she announced that she would be closing her gallery at the end of June.
Lisa Spellman, the owner of 303 Gallery, who will be consolidating her headquarters above a vast second space she opened last fall in the center of Chelsea, said: “What drives me crazy are these clichés that say only the very, very best survive. I don’t believe that recessions are Darwinian systems.”