"Art Market Shows Signs of New Life" - Crain's New York Business (11/17/09)
Crain's New York Business original article: Art Market Shows Signs of Life
By MIRIAM KRENIN SOUCCAR
Published: November 17, 2009
The picture is looking prettier for the beleaguered art market.
The important fall evening sales at Christie's and Sotheby's that ended last week fetched a total of $423.9 million, a whopping 40% increase from the previous round of evening sales in New York last May.
Local gallery owners also report that business has picked up dramatically in the past few months, most importantly with American collectors who had disappeared completely in the past year.
“I feel as though we're back,” says Rachel Lehmann, a partner in the Lehmann Maupin gallery in Chelsea and the Lower East Side, where sales have increased considerably since September, though she wouldn't release numbers. “Things aren't like they were before the recession, [the work] takes longer to sell, but the public is back in the buying game.”
Of course, the market is still falling far short of the heady days of just a couple of years ago, when art students became stars overnight and young investment bankers morphed into major collectors.
Smaller in every way
Every aspect of the market is smaller. The next major event in the art world, Art Basel Miami Beach in December, has about 800 participating in that fair and the 15 satellite fairs that take place at the same time, a 20% drop from recent years. The number of satellite fairs is down also, from 20 the past two years.
“We're getting some indicators that suggest the market has bottomed out, but I don't think the growth resumes immediately,” says Baird Ryan, managing partner of Art Capital Group. “Revenues are still way down from a few years ago.”
Even so, dealers are now optimistic that collectors are gaining confidence and that prices will continue to rise. At the same time, the success of the fall auctions—Andy Warhol's 200 One Dollar Bills went for $43.7 million, almost four times Sotheby's high estimate of $12 million—will bring out more sellers, thus increasing the amount of high-quality work on the market.
“As long as the financial markets continue as they are, Basel Miami is going to exceed expectations for everybody,” says Michael Sellinger, a principal at art consulting firm Cottelston Advisors. “The Chicken Little 'end of the world' scenario has not played out.”
Indeed. The forecasts that hordes of galleries would close were largely unfounded. In the past six months, only 11 galleries out of more than 350 in Chelsea went out of business, and five new galleries opened in the neighborhood, according to OneArtWorld.com, an online provider of information about the art industry.
Poster child of the boom
The most high-profile loss was Becky Smith's Bellwether Gallery in Chelsea, which closed in July after a year of declining sales. Ms. Smith became somewhat of a poster child for the art boom, when The New York Times Magazine wrote a profile of her, titled “How to Become an Instant Art Star,” in 1999. So her exit from the clubby New York art scene attracted a lot of attention.
Ms. Smith declined to be interviewed, writing in an e-mail, “I would rather not be the voice of forced closings anymore.” She then added, “Aren't things pretty OK for most folks these days?”
It certainly seems so. It didn't take long for someone to snap up Ms. Smith's vacant space. Andrew Edlin Gallery moved from a gallery multiplex on West 20th Street into Ms. Smith's spot, a much pricier, street-level space on 10th Avenue. And David Zwirner recently opened a 5,000-square-foot gallery, his fourth in Chelsea, on West 19th Street, a space that will enable the dealer to pursue more ambitious, large-scale exhibitions.
Despite the optimism, dealers aren't taking the recovery for granted. Around 50 galleries are getting together to create a new event, New York Gallery Week. The event will debut in May, and will feature parties, panels and gallery tours in an effort to get people to visit galleries rather than just coming to New York for the art fairs.
“We're trying to invigorate people to come to galleries again and to invigorate sales,” reports Jason Murison, the manager of Friedrich Petzel Gallery, one of the event's organizers.
Correction: Some 800 galleries will participate in the Art Basel Miami Beach fair, as well as all the other ancillary fairs that will run in Miami at the same time. That was unclear in the original article, published online Nov. 15. In addition, Rachel Lehmann owns Lehmann Maupin Gallery. Her name was misspelled in the original article.