There are good reasons to suppose that art buying habits are changing. Private jets lined up on the runways and parking areas at Basel airport a few weeks ago were a very tangible manifestation. The high prices for the best of Chinese art at auction easily eclipse those in galleries: indeed, galleries are all too conscious that the buyers from China who pack the auction rooms do not, for the most part, ever find their way into commercial galleries.
The number of art shows internationally has snowballed in recent years. The European Fine Art Foundation’s report for 2015 says that there are now in excess of 180 international art fairs. There were just 55 in the year 2000. The global market for works of art is now estimated to be worth US$68 billion, a rise of 7% year on year. Why then are galleries closing in, for example, London’s up-market Mayfair if the market is so buoyant?
There are some local factors at work in places like Cork Street, Mayfair. The traditional bases for London’s galleries are being bought up as part of the property explosion by developers who see no financial mileage in seeing their expensively revamped properties let out to modest gallery businesses who earn their money on a relatively long term basis. So, instead of galleries, expensive handbag, jewellery, fashion and accessory shops proliferate. Gucci, Armani, Burberry and the like enjoy dramatic mark-ups and vast markets for their overpriced fripperies.
And a painting hanging on the wall, no matter how attractive, does not have the instant ‘buy me’ ingredient unlike something being disposed of in the flash of a second by the fall of the auctioneer’s hammer.
We recently sold half a dozen items which had been languishing on our own gallery wall, or in the showcases, at auction. Most more than doubled the prices we had been asking in the gallery and one got six times the £200 price we had been asking for a small bronze censer. You can’t beat the fever of the saleroom for achieving what are sometimes quite extraordinary amounts of money for comparatively modest items.
Galleries are, of course, expensive to maintain: lighting, staffing and insurances are just a few of the very heavy costs involved. Dealing with the public means you have to be insured, both against them and on behalf of them. Third party insurances have to be taken out for at least £2m. or £3m. in case they trip over the doorstep on the way in. And there is nothing so depressing as sitting in your gallery all day just in case a serious buyer might appear.
Hence the appeal of art fairs, temporary exhibitions and so-called pop-ups. All are rather more attractive, and certainly more exciting, than sitting twiddling ones thumbs in an expensive gallery whilst the meters runs incessantly.
The entry price for art fairs can be high and we are not talking about gate receipts. The largest income from fairs is derived from letting the space to exhibitors, followed by sponsorship. However, a second tier of cheaper-to-access exhibitions is now appearing. Entrepreneur Tim Etchells has started three new events in recent years: Art 13-15 in London, Sydney Contemporary down under and Art Central, which enjoyed its debut this year in Hong Kong. These fairs are less concerned with the super-rich private jet class of buyer and participation is cheaper.
Then, of course, there are the online sales. We are a bit sceptical of the phenomenon. Online certainly works for everyday items but art is rather more complex and should be unique. Assessing art online is tricky and many buyers would not dream of acquiring something they had not handled (porcelain) or seen in person (a painting or tapestry, for example). The advantage of the internet is probably that it will get just a few extra sales and as a low cost medium serves to amortise general sales costs.
Yes, the art market is changing. However, there are signs that even the new art fairs are becoming picky about who they let in over the door to exhibit. It appears they are going for quality rather than quantity. The whole business is organic and constantly changing and it would be a mistake to write off the gallery quite yet.