The Downturn in Chelsea

We know the economy has had an effect on the art world. In a series of short conversations recently, I found out just what that effect has been on individual dealers in Chelsea and elsewhere

“See the sidewalk?” said the dealer, looking down to the street from her gallery on a high floor in Chelsea. It was a Saturday afternoon, just after lunch, and the pavement was nearly deserted. “It’s been like that for the past month.” There wasn't so much panic in her voice as resignation.

Foot traffic in the galleries has been correspondingly light, so over the past couple of weeks a number of dealers have had the time to chat with me as I made my rounds of the shows. What follows are snippets of my conversations with them. I’m not identifying the dealers by name—it would be unfair to attribute quotes from a personal conversation; indeed I’ve removed as many identifying elements as possible—but I guarantee that all the conversations were real, with quotes as accurate as I can recall. (A few conversations took place outside of Chelsea but they were in keeping with the tone of the conversations, so I included them.) Not intending to write a piece about the downturn at the galleries, I took no notes, but as the conversations spun themselves into a thread and the thread wove itself into a narrative, I realized there was a story.

The changing face of Chelsea,
above and below
Going Cyber
“I’m taking my gallery virtual,” said one dealer, who plans to expand his web presence and work out of his Chelsea apartment. He’ll close his doors at the end of the year. And what of the artists he represents? They’ll be on his online roster, but there will be no actual shows. Fairs are "not out of the question, but not right now."

Similarly, another dealer will show out of his storage cubicle in the area. (There are several huge storage facilities in Chelsea.) “I’ll have a full inventory on the website, with a small selection on display in the storage unit,” he said. “My clients will think it’s an adventure.”

This approach wouldn’t be possible without cyberspace, of course, and given that so many dealers have already been selling from the Internet, it just may work. But what does it mean for artists, who need to show as much as to sell? And what does it do to a lifestyle in which gallery going and openings are part of the social and creative process?
Staying Put, Doing Outreach
The dealers who remain committed to staying in their spaces are working the phones, calling and recalling clients. Said one dealer: “I worked out a sweet deal for a client—sweeter for the client than for the artist or me, actually—and he just called to say, ‘We really like the painting, but we’re going to hold off for now.’ It was only $9000.” It wouldn’t be so bad if it were an isolated instance but, she says, “I’ve been getting that response for the past few weeks.”

“Clients aren’t returning my calls. I think they’re embarassed,” admitted another.

Other dealers are making presentations to clients in their homes, in one instance driving more than a hundred miles in hopes of making the sale.
Taking a Job
“I need a job!” said one dealer, half in jest.

"I’ve taken a job to support the gallery before, and I can do it again if I have to,” said another.

Yes, we understand. Is there an artist (well, an artist without a trust fund) who has not had to do that at some point to support their studio?
Fair and Equal
The taking-a-job conversation evoked a strong sense of déjà vu. Three years ago at Armory fair time, I congratulated an out-of-town dealer for having made it into one of the hard-to-get-into satellite fairs, which at the time was being held on a ground-floor warehouse space not far from the Armory’s pier location. She sighed. “This was my backup. I really wanted the Armory but didn’t get in. But now I consider myself lucky." She ticked off the names of half a dozen dealer friends. “They didn’t even get into this fair,” she said. Just as I was thinking, Now you know what it’s like for artists, she said, “Now I know what it’s like for you artists. The rejection is terrible. It’s so demoralizing. “ Umm hmm. Then in a flash of insight she added, “Never before have artists and dealers been on such equal footing.”

Cut to the present. Never have dealers and fair organizers been on such equal footing. “I’m not participating this year,” is the phrase I've heard most often. With galleries not applying to get into the fairs, organizers have taken to calling dealers to invite them in. At least one previously rejected dealer signed on. “I figure it will guarantee me a spot when the economy picks up and it’s hard to get into again,” she said. I’m not sure whether she was being optimistic or masochistic, but she had already started packing her inventory.

“I've got to sell $80,000 worth of art just to think of breaking even,” said one dealer. She’s going, but she’s biting her nails.

Many of the dealers I spoke with have turned down the invitations. And not only are they not clamoring to get in, some are clamoring to get out after they’ve signed the contract. “Did you hear that (art fair) is suing (dealer) for breach of contract?” asked one gallerist friend.

“I pulled out," said another. "I’d rather lose a grand [in deposit money] than the $30,000 it will cost me for the booth, the shipping, the hotel and the flight.” She could do that because she hadn’t yet signed on the dotted line.

This is not to say that Miami will be a ghost town. Many of the dealers who aren’t taking a booth will go to see and be seen. As one pointed out, “This will be the first time I’ll actually get to see what everyone else sees.” And who knows? A big uptick in the Dow could sends hordes of collectors from Europe and South America with euros and pesos burning holes in their pockets. Art is a tangible asset, after all.
Renew the Lease or Move?
Fear of commitment (or lack of money) is also an issue when it comes time to renewing gallery leases. The first wave of 10- and 15-year leases in Chelsea has already started to cycle around. Some dealers signed new leases—in some instances at double or more what they’d been paying. Others closed their doors because the rent was just too steep. The owner of 511 W. 25th is condo-izing his building--the ads have appeared in a few art magazines. Want to stay in the building? Buy your space. (I don’t know how the recent downturn has affected this transition, and to be honest, I feel uncomfortable asking the dealers in that building.) But some galleries have already departed.

A.I.R., for instance. This venerable women’s co-op is something of a bellwether when it comes to locating and relocating. It started life on Wooster Street, moved to the then fringes of SoHo—Crosby Street—when SoHo got too pricy, then back to Wooster, then over to Chelsea relatively early on (I may be missing a stop). Now it has moved to Front Street in Dumbo, where it has found a nice space on the second floor of a building where other dealers are located. It used to be that the gentrification of an area drove out the artists; now it also drives out the galleries. And now that galleries are moving into artists’ studio buildings, it’s only a matter of time before the artists have to vacate. There’s something almost biblical about the cycle.

Even the blue-chip galleries are feeling the pinch. I heard this story from a gallerist friend: A high-end dealer had renter’s remorse after signing a lease on a sprawling space in Chelsea just days before the market crashed. “When he tried to back out after the crash, the landlord threatened him with a lawsuit.” He's there now for the duration of the lease.
Meanwhile . . .
Emerging and mid-level artists keep sending in submission packages and j-pegs in the hopes of securing representation. Dealers at all levels are keeping their eye on the bottom line as sales trail off, trying, as one dealer puts it, “to come up with new models for doing business.” Fair organizers are forging ahead with Miami.

So the shows go on.

For now.


Anonymous said...

are the "going cyber" dealers still going to expect 50% even if they are not providing shows and all of that?

i wonder what a fair percentage might be once the satisfaction of a show and any possibilty of a review has been removed.


tony said...

I really tried to sympathise with these hard pushed gallery owners but sympathy can only go so far. If the economic downturn leads to something I hope it will be a greater integrity on the part of dealers and & artists alike; an art less self-proclamatory and collectors who buy for 'love' rather than investment/vanity.Having said that I think the reality will be that a great percentage in the art world - gallery owners or artists - will be spinning around in circles “to come up with new models for doing business.”

Joanne Mattera said...

we didn't get that far in the conversation. Good point, though. I think we all need to see how this plays out.

You're speaking like one who has little first-hand interaction with dealers. In other words, you're being naive.

There is a world, no, a universe, of difference between the big blue chippers who are dealing megastar-artists to Russian billionaires and the midsize gallery that needs to sell $100,000 worth of art a month to break even. The majority of dealers you'll meet are in the mid-size, mid-level category, and the majority are decent and hard working, selling to clients of relatively modest means who love art. These dealers are as involved with art as we artists are, mosat plow their profits back into the business, and they're totally dependent on the business of their gallery to support them. There is no lack of integity that I have seen.

tony said...

Well Joanne, I'm so pleased that your experience with Gallery owners has been so refreshingly rewarding with all this self-sacrifice & integrity going around. Obviously there are many who express the qualities that you have mentioned but the 'players' just aren't like that.

Joanne Mattera said...

I thought I was clear in my post and in my response to you that I am not speaking about "the players," aka the blue-chippers. That's another world. I don't know about it, and I don't write about it. I'm speaking about the committed midlevel dealers who are, at this point, working hard to keep their nose above the waterline. That's what most artists do, isn't it? So I see affinities between the artists and the galleries. If they fail, it is a calamity not only for them but for us. It's a symbiotic relationship, artists and dealers. We are in this together.

Anonymous said...

Anon: I'd imagine that galleries that retreat online will still get 50% commission. That commission is payment for their handling of the sale, from any marketing that was needed, customer relations, to order processing. If they continue to do all that, they deserve the 50%.

Some online-only galleries ask for a smaller percentage, but they are usually partial self-service galleries: they bring in the eyeballs and handle order processing, but they don't deal with customers directly, and the artist usually has to maintain their own section of the website.

Anonymous said...

daniel - that is a nice chunk of change to put in the pocket if a dealer is not having to pay rent on a space, utilities, gallery staff, and likely much less on insurance... not to mention not even having to get up in the morning, put on a "suit", go to work and deal with the public.

Joanne Mattera said...


I'd disagree. Part of the 50% commission is the visibility the gallery affords the artist--the bricks-and-mortar space that allows gallery goers, including collectors, critics and curators, the opportunity to see the actual work. If the gallery that has retreated to cyberspace continues to take ads in the art magazines and show an artist's work at the art fairs, OK maybe, but otherwise I would think a smaller commission, say 40%, would be more fair.

Anone else want to weigh in here?

S.A. said...

We may be talking about a new species here --- something like a consultant --- in other contexts it might be called a manager or an agent. If you remove the physical exhibition component, the cost of doing business is drastically reduced. I'd be more inclined to think a 20-25% cut might be appropriate. A lot would depend on the previous reputation of the gallery -- for many well-established galleries, sales are not so directly tied to shows. The shows end up being more for the artists' resumes, the press, and the public at large.

I think the real loss, if this sort of cyber transition occurs, will be to that public -- viewers of the physical art objects. It's hard to say what obligation the galleries feel toward the viewers who do not buy art.

Anonymous said...

i can't see artists forfeiting exhibitions or possibilities of reviews and public feedback. if it was just about the sale why get into art in the first place.

diy shows would pop up and those organizers would become new gallerists. critics and reviewers would focus on them and increase reputations. no critic is going to write ad-copy for a cyber gallery.

20% to a cyber representative would be generous.

Joanne Mattera said...

Anon writes: "diy shows would pop up and those organizers would become new gallerists."

I think you're on to something here, as entrepreneurial spirit is strong, if untapped, in many artists. But the same real-estate issues constricting the galleries will surely constrict artists, no?

So where will these events take place? Queens? Way out in Brooklyn? Up the Hudson? New Jersey? And who will come?

Will artists start showing on street corners? (It's been done, actually.)Will open studios gain new currency?

Anonymous said...

Maybe the WPA will get reinstated and we can all sing cum ba ya and hhold hands while we paint murals and eat in soup kitchens. With the blue chip galleries sucking up all the disposable income of mr,. and mrs. rich, the only hope the emerging artis will have is in the hand out and crumb tossing

Anonymous said...

damien hirst did freeze in a warehouse.

Anonymous said...

JIT 'just in time', where small businesses supply parts. Each part business usually has no relation except to the major whole. Via a streamline production and excellent transport system, all things, small parts and big, come together, Just in Time.

I don't wish anyone reduced income. I do wish everyone greater 'general-relativity', increased 'risk-taking' karma, Longer and more casual Friday Gallery Lunches, and so on.
Collectors should feel comfortable arriving on the doorstep without feeling the pressure to buy, that's for sure!
More events, more parties, lot's attention to art. Sounds good!
Great art, great people, huge disagreements, what else could one ever want -- in these times.


Eva said...

I think that for every gallery who finds "a new way to do business" (and closes their bricks and mortar) there will be a new space of some sort put up by artists. It may be only a window project or shows in someone's living room, but these ventures often lead to galleries and they always lead to new opportunities. I'm thinking the hard times of the East Village. I opened my own space when I faced tough times, not when times were good. And a bunch of good things came out of it.

I don't think any dealer who isn't producing actual shows, postcards (paper still counts - it's a lasting document) and the like deserves 50%. s. a. is right - art is a tangible product; it isn't completely served by the JPG. Even when I am not having a show, my dealer has the work and can show it to someone anytime. That's a very vauluable thing...

S.A. said...

The idea that in hard times the most interesting stuff happens is certainly true. When NYC was virtually bankrupt in the mid '70s, there was an explosion of DIY energy -- Clocktower, PS1, the Kitchen, 112 Greene, etc. - and leading into Eva and her colleagues in the East Village (not to mention Punk Rock and other art/music cross-fertilizations). One of the most striking differences back then was that for artists (at least until the '80s), sales were not really a thought, or a possibility, or an issue -- the work drove everything, and the energy of the scene came from the work itself, not from the prices the work (or the dealers)generated. A new infusion of some of that sort of energy would not be a bad thing. Maybe we should hope for lots of vacant buildings.

Joanne Mattera said...

The dichotomy of poor-but-creative versus rich-with-no-integrity troubles me--whether the reference is to artists, dealers or collectors. Things are not so black and white.

When I write about galleries and artists, it's rarely with regard to blue chippers. I don't know that world. I write about what I know, and that's the vast middle ground of artists and dealers who are working hard, trying to support themselves from their efforts. The hours are long, the expenses are high, there's a small pool of collectors for a large ocean of art.

The economy is changing this delicate ecology. When collectors stop collecting, galleries close and artists don't have the same venues. Sure, we can go back to showing in storefronts. DIY venues can be wildly creative.

Personally, though, I don't want to return to those good old days. It's easy to romanticize them, but I don't want to return to let's-put-on-a-show-and-spend-three-days-of-round-the-clock-installation-only-to-have-four-people-show-up. Sure, they were the petri dish for many artists, but how many venues were there in relation to the few you actually remember?

I don't want to return to do-I-use this-money-to-buy-food-stamps-or-art supplies; to roommates; to sleeping on a futon; to never having enough art supplies for a project, or not the specific supply I need at the moment; to always being too hot, too cold, too hungry or too tired.

Did we have more integrity as artists then because we had nothing? Do young artists now
have more integrity now because they have nothing? Does a dealer have more integrity because she doesn't get into an art fair--or doesn't apply because she can't get in?

Have we so internalized the fallacy of poverty-as-purity that we can't imagine ourselves as having creativity, integrity and some measure of success?

S.A. said...

"The dichotomy of poor-but-creative versus rich-with-no-integrity troubles me--whether the reference is to artists, dealers or collectors. Things are not so black and white."

Well, you're absolutely right, Joanne --- it's far too easy to romanticize the incubator days...and trying to remember where this thread started....
There are so many more artists now, and such an expanded audience for what we do, there is really no comparison. Realistically, I don't believe that audience is going away just because money is tight, and we aren't going to stop making art. All of us who operate on that big mezzanine level will keep working hard during the tough economic times. Maybe I'm naive or overly optimistic -- but I feel that the dealers who are good at what they do will find ways to tighten up and persevere. Maybe those who have to resort to cyber-dealing will form a new third or fourth tier -- which might not be so bad. Good news is we are after all talking about art here, not some obsolete technology.

Eva said...

I think. s. a. just said something very important (again), that "there are so many artists..." When I first came up, an artist was not what everyone wanted to be. The people studying art were not on some fast track to economic and artstar success. The classes were small. The museums were empty. The first megashow (Tut) was just forming. That's all changed. They are churning out the MFAs, whatever the market. And now that this market is tight, there's just not going to be as much action. Maybe you cannot idealize lean too much but I don't idealize boring markets and dull galleries either and yes, I felt like that about some of these middle markets we are talking about. I liked the high and I liked the low; those were always my favorite places. No, that's not where I show much anymore. I show in the middle and feel damn lucky just for that. But if indeed one upshot of hard times is a bubbling up of the low, I'm not going to hate it altogether - can't afford to - and damn, it does look familiar....

Anonymous said...

Fascinating read and discussion. Thanks.