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Is the art market unhealthy?

3 July 2015

David and Renee Conforte McKee recently announced the closure of their eponymous gallery on 5th Avenue in New York. Typically for a commercial gallery, the expiration of a lease prompted their decision to close after 41 years in the business, working with internationally acclaimed artists including Vija Celmins, Philip Guston and Harvey Quaytman. It’s common practice for galleries to announce their closure with statements of thanks to ‘the museum curators, collectors, artists, our staff and a dedicated, intelligent public that endlessly visits’, as they did. Unusually this farewell was complemented by an unflattering assessment of the contemporary art market:

which has grown so vast that our gallery model is in danger: the collector’s private experience with art matters much less, as the social circus of art fairs, auctions, dinners and spectacle grows…The value of art is now perceived as its monetary value. The art world has become a stressful, unhealthy place; its focus on fashion, brands and economics robs it of the great art experience, of connoisseurship and of trust.

Despite an ever-expanding market for modern and contemporary art, this sentiment is shared by many. Marion Maneker, writing for Art Market Monitor observed that ‘so many long-time art dealers seem to have a high level of disdain for buyers’, and asks whether the differentiation between ‘new buyers’ and ‘old collectors’ is a way of flattering existing customers. In The New York Times Scott Reyburn quotes James Roundell, a director at the London and New York dealer Dickinson:

There’s a lot of fashion involved, and people are buying for show…I’m not sure that many of them are buying for the love of the object. For some, particularly wealthy Americans, it’s all about playing the market. Back in the early 20th century, collectors would buy a painting, live with it in their own home and leave it to a museum. Now it’s about acquisition, not collecting.

It’s a subject Maneker addresses at greater length with Reyburn during an Artelligence podcast (22 February 2015) in which they discuss the struggle private dealers can face in London with fashion orientated, non-specialist ‘buyers’ who lack the long-term commitment and drive of so-called ‘old style’ collectors. ‘New buyers’ will often enter the market at much higher price points, rather than steadily graduating from prints and works on paper to larger, seminal works, and are often associated with flipping, trend-led purchases and a near constant awareness of investment value.

Are changes in the market simply a reflection of changes in the world at large? Art Basel Director Marc Spiegler recently offered the following rationalisation of the subject in an extensive interview with ArtSpace:

Running a gallery is a totally different job now than it was 25 years ago…Being a gallerist today means that you will have to understand how to work with social media, you will have to travel around the world, and you’ll have to deal with different cultures than your own. It’s a very different game, but frankly every industry in the world has likewise changed.

Spiegler summarises well documented changes in the art market: more specifically the development of an event-driven economy, a growing reliance upon online retail channels, websites and digital communication, a dramatic and exponential increase in size, and the concomitant increase in air miles. If we accept it’s not just the art world that’s changed but the world economy itself, is it simply old-fashioned and outdated to believe in the ‘old collector’? Are the McKees another example of a gallery unwilling to adapt and evolve as the world changes around them?

Amanda Sharp, Director of Frieze Art Fair, is sanguine when it comes to the fortunes of contemporary dealers. Quoted in The Financial Times by Rachel Spence, Sharp observes that running a gallery was always considered ‘a very high-risk business’. It’s only since the contemporary art boom in the 1990s that making a living as a dealer, or indeed an artist, has been practicable and desirable for more than a few.

In lockstep with the increased size of the market is the concern that a small minority command the lion’s share of sales by value. The TEFAF Art Market Report 2015 observes that the top the top 1,530 lots sold at auction in 2014 represent 48% of the value of the fine art market, but less than 0.5 % of the transactions. In the private dealer sector an elite handful of mega-galleries monopolise the upper tiers of the market – with Gagosian, for example, reportedly turning over nearly $1billion annually. Yet this is nothing new. Writing about the art market in early 19th-century London, James Hamilton notes it was, ‘ruthlessly, feast for some and famine for many’. Perhaps some things never change.

Necessity is the mother of all invention, and galleries in the middle tiers seem increasingly open to new business practices. Two of Berlin’s best loved galleries, Esther Schipper and Johnen Galerie, are merging. Reported by Artsy, Jörg Johnen’s words could be mistaken for those of the McKees:

I am a little bit tired of the whole art business…I still love art, but I have problems with the art world nowadays — all the fairs you have to do, the big production expenses…It’s a new style; everything is bigger, much more professional. When I started the gallery the whole thing was completely different.

Such an approach may inspire other mid-tier galleries questioning how to grow and expand. In contrast, some have opted to join the mega-galleries rather than compete in an already congested marketplace. A case in point was the recent announcement that longstanding Mayfair dealer Gerard Faggionato was closing to join David Zwirner as a partner and director. A similar strategy has been adopted by Tom Cole, who operated successive galleries in Fitzrovia and Whitechapel from 2011 to 2014, before joining the Peckham-based Sunday Painter gallery as a partner and director in early 2015.

It is clear that the art market, the world at large and the conditions in which dealers now operate have changed dramatically. Whether this is good or bad is a moot point. Business demands constant evolution to survive. Why should the art world be any different?

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