Post-Art Basel, small and mid-sized galleries adapt to market slowdown

Notes to Editors: This story originally appeared in On Balance magazine. Art News Newsletter for updates on the art market and more. Sign up here Received every Wednesday.

If sales results on the first day of last month’s Art Basel are anything to go by, one might think the fair was a relative success. For the big galleries, that may be true. David Zwirner The fair sold a Joan Mitchell diptych for $20 million. Hauser & Wirth Although the pace of sales slowed, the most expensive work was sold for $16 million by Arshile Gorky. pace A painting of the show’s main character, Agnes Martin, sold for a reported $14 million.

But upstairs at the fair, where small and midsize galleries typically congregate, there were rumblings of a more subtle shift in market conditions. These dealers are facing shrinking margins, rising shipping and material costs, inflation and more cautious collectors. Risks for dealers René Julien Praz Recently told Art Dailyis “huge.” Praz recently closed his gallery, Praz-Delavallade in Paris and Los Angeles; he cited the high overall cost of exhibiting work at international fairs as one of the factors that led to his decision.

Transportation, insurance, on-site personnel, and booth fees all add up. “We left Florida $80,000 in the red during Art Basel in Miami,” he told Art Daily“It’s like playing Russian roulette every time.”

Now, a month into the fair, the summer break in the art calendar is in full swing; Art News Spoken to several small and mid-sized galleries, most of them at Art Basel and one at Liste, to discuss the current market.

No gallery considered the recent Art Basel a failure, with top impressions including “unexpectedly good,” “relieved,” “better than expected,” and “good sales, overall good feeling.” Galerie Jocelyn Wolff in Paris went so far as to say it was one of “our best” fairs. (However, this assessment by the founder Jocelyn Wolfe But the proviso states that the gallery has “never sold out a gallery exhibition or fair booth.”)

However, dealers do feel that the market is very different from 2019, or even from the first show after the outbreak of the epidemic. Alex MoreCo-founder of Mor Charpentier in Paris and Bogota Art News“Art Basel is still the most prestigious fair, where we bring the best work and where you can connect with people you wouldn’t normally connect with… but I think the level and the volume has gone down.”

Dealers said sales activity at both Basel and Liste was not uniform. Some dealers said a lot of work was sold on the first day, which is typical, while others said the move was a departure from “one-day shows,” where sales mostly happen during the opening, and a good indicator of where the fair will go next. Notably, smaller galleries tend to say they traditionally sell throughout the week of Art Basel, with first-day sales setting the tone. Now, collectors are putting auctions on hold, and dealers are seeing mixed sales throughout the weekend.

The slower atmosphere is consistent with the “overall slowdown” in the market over the past six months to a year, dealers said. “Collectors are very selective, which I think is a good thing, but it’s back to a slower pace now, which was too fast since the pandemic,” said Chicago dealer Monique Meloche Tell Art News“The market went crazy when the pandemic broke out, but that’s not true. This pace can’t be sustained.”

For Wolff, the reason for the slowdown is not a lack of willing collectors but a “pricing trust issue.”

Wolfe believes this is because original prices for works by some mid-career artists with fast-growing careers are higher, while the value institutions generally place on contemporary artists is “weaker than it used to be.” Museums, he says, are “being challenged in their recognition” and are “not as readable” today, especially for collectors who are less interested in certain identity-themed works popular in institutional exhibitions.

“There’s always been a gap between what the art market values ​​and what museums value,” Wolff said. “But now it’s a little more complicated and the prices are higher.”

However, for these small and mid-sized galleries, the economic slowdown has made the calculations around art fairs trickier, especially when you consider the operating costs of art fairs. As multiple dealers said Art NewsThe costs of painting, shipping, mounting, storage and other indirect costs have risen sharply, with Meloche saying they are “at least 50% higher than before the pandemic.” Collectors are also feeling the impact of these costs, and Meloche said they continue to gravitate toward collecting paintings because of their effectiveness.

“I’m not complaining.” Jose CurryCo-founder of Kurimanzutto in Mexico City and New York Art News Art Basel. “We’re doing well, but the fact is that the average shipping cost is much higher than it was two or three years ago, so the margins are much lower. So, you can feel that.”

These issues are particularly acute for galleries from the Global South. Catalina CasasThe founder of Bogota gallery Casas Riegner told Art NewsSouth American galleries need to hold fairs “because it activates our market in a way”, but the costs make it difficult to compete.

“But I think if the art world wants us to survive, what they need to think about is: On what terms are we competing?” Casas said. “We are essentially competing on the same terms as the galleries that occupy the higher end of the market, and I have to sell my entire booth to sell one work at a major gallery.”

She said this year’s fair was better than last year’s, with galleries showing works priced from $7,000 to $95,000. But because deals at the fair are still being negotiated, it’s difficult to fully assess this year’s performance.

Geopolitical concerns have loomed over the market in recent years, and particularly over the past 12 months, and all dealers agree that they have caused collectors to be cautious and, in some cases, not to travel at all. Curry said issues such as the wars in Ukraine and Gaza, and the turmoil of elections in the United States and Europe have created a “climate of uncertainty.”

“People are holding onto assets and not spending like they used to,” Curry said. “Everyone is waiting to see what’s going to happen, so that could lead to a tightening of the market, so there’s not as much liquidity as there has been in years past.”

While the tight market has led some to conclude that collectors are seeking out “safer,” more established names, all of the gallerists interviewed stressed the need to stick with their own unique projects and even be willing to take more risks.

Mor Charpentier, for example, plans to open a new space in the Marais district of Paris in October to coincide with Art Basel in France that will be twice the size of its current space. The gallery is also investing in its residency program in Colombia. Jochen MayerThe co-founder of Berlin’s Meyer Riegger Gallery has opened a new gallery in Seoul as an alternative to attending multiple Asian fairs each year, hoping to help build long-term relationships in Korea and Asia through a permanent space. Bomb Plan During Covid, continued to develop its summer spaces opened in the Spanish countryside in partnership with Prats Nogueras Blanchard (in Barcelona and Madrid).

“It’s true that fairs are necessary, they bring you visibility and sales, especially if you’re from somewhere like Barcelona that’s not the epicenter of the art world, but this spirit of collaboration that we’ve experienced during the pandemic, where you share energy, artists, collectors and costs, is definitely something to continue to remember,” the gallery told Art News In an email.

For Meloche, staying the course means continuing to make slow but steady progress with artists and making a greater effort to meet collectors in person, whether that’s visiting their homes to have deeper, serious conversations about an artist’s work and practice, or working with other galleries to make sales together.

“Now is also the time when you have to stay true to yourself,” said Curry of Curry Manzutto. “Now you can’t change your look and just follow the crowd. I think that’s very damaging for artists.”