Art market news
Art market news
Art market news

In the wake of a wave of closures, galleries are adapting to survive

Dealers are showing only at art fairs or banding together to share facilities–or doubling down on space to break through to the next level

by Anny Shaw  |  14 July 2017
In the wake of a wave of closures, galleries are adapting to survive
Cromwell Place, a £20m gallery complex in London, will offer short-term rental space for dealers and others in the art world. "We are keen to work with people who will build their business through this model", says founder John Martin
Under pressure from rising overheads and thinning margins, the traditional bricks-and-mortar gallery model is giving way to all manner of temporary, collaborative and fluid platforms. This story from the July/August 2017 print edition is published in two parts. Click here for Part 1. 

Taking the show on the road

With an estimated 270 art fairs a year globally, and galleries reporting between 40% and 60% of their sales taking place at fairs, dealers are increasingly embracing them as viable alternatives to a year-round, permanent address. 

London dealer Anthony Reynolds, who closed his physical space in 2015 but continues to operate, says he treats art fairs as “another gallery venue”, usually presenting solo shows and applying to exhibit in sections of art fairs that allow him to focus on one period in history. This year his gallery is taking part in five fairs.

The squeeze is also taking its toll on dealers of historical works, many of whom have chosen to function as inventory-holding advisers rather than maintain a physical location. Some are turning to art fairs as surrogates for exhibition spaces. Last autumn, the Flemish Old Master specialist Johnny van Haeften closed his Mayfair gallery after four decades to focus on private dealing, and in May the 20th-century British art dealer James Hyman made the decision to close after 20 years in Mayfair and St James’s following “a huge rise in the rent and an imminent increase in the rates”, he says. Hyman, who has previously shown at Frieze Masters, says he will continue to participate “in leading art fairs across the world”.

Anthony Reynolds spoke about the new gallery landscape with Josh Baer and Janice Guy at Art Basel last month (Art Basel)

Facing a potential exodus of their gallery clientele, many art fairs have begun accepting applicants with no fixed abode. Victoria Siddall, the director of the Frieze art fair, says it is no longer a prerequisite that galleries show their artists’ work in a single space, and that “exhibition-making is an essential part of being a contemporary gallery”.

Art Basel is one of the last fairs to stipulate that galleries must have a permanent physical space in order to show in its three fairs, but chinks could soon appear in the concrete and aluminium-clad Messe Basel exhibition halls. 

Marc Spiegler, the global director of Art Basel, says the fair’s selection committees have been “intermittently considering whether or not to change the regulations” in response to the fluctuating gallery landscape. This year, the Swiss edition of the fair stood firm. “Paying rent, staging shows and employing people simply represents a higher level of commitment to the artists the galleries are working with and to the cultural landscape of the cities in which they are sited,” Spiegler says.

For some dealers the jam-packed art fair calendar has become too onerous. In an email in March announcing the closure of London’s Vilma Gold gallery after 17 years, co-owner Rachel Williams blamed “an endlessly accelerating global cycle of fairs” for the demise of “a physical space where artists, collectors and curators could engage directly with the exhibition programme”.

Others in the trade say it is a myth that art fairs are profitable. “One colleague told me they have to make $2m at Art Basel in Miami before they see a penny. People are pleased if they break even,” says the dealer George Marsh, who recently closed the William Benington Gallery in London, which he co-founded. He plans to take time out from art fairs and invest that money in a Buckinghamshire sculpture park, Contemporary Sculpture Fulmer. “The system benefits a few very large galleries and a few very large art fair providers. Through necessity, we have been forced to take back control,” he says.

Collaborative models offer a foothold for smaller players

Promoting foreign exchange: Nicole Russo of Chapter NY (Courtesy of Nicole Russo)
Promoting foreign exchange: Nicole Russo of Chapter NY (Courtesy of Nicole Russo)
Some dealers are banding together to create alternatives to the art fair experience. John Martin, who was forced to leave his Mayfair gallery in 2015 because the £90,000 annual rent was about to triple, is the founder of a project to create a hub of around 30 galleries by developing five historic buildings in South Kensington. 

The dealer has teamed up with the property developer Scott Murdoch of CWM; Hugh Garmoyle, a former lawyer; and Toby Anstruther, the chair of South Kensington Estates, which owns the properties, to run the project, dubbed Cromwell Place.

The main aim is to boost footfall, which has dropped dramatically in traditional gallery strongholds. “That’s why art fairs are successful. You might have 200 people a month come through your gallery, but you will see 300 people a day at an art fair,” Martin says. “We want to ensure that Cromwell Place is able to generate sales well in excess of those generated by conventional, standalone 
galleries and in time, prove a better alternative to art fairs.”

Arguably the biggest pull for dealers is the potential to reduce overheads by between 30% and 50%. Another draw of the £20m project is that it will feature dining areas, offices, art storage spaces, concierge and security—all facilities that dealers normally have to provide themselves. In June Martin appointed the art adviser May Calil to develop the gallery and exhibition strategy.

The objective is to be as flexible as possible, with membership open to commercial galleries, public institutions and curators, among others. “Members might take a whole building or part; they might be there for two weeks or four,” Martin says. The project will also employ demand-based pricing. “The first week of October is naturally likely to be more expensive than the first week of January,” he adds. 

Emerging dealers are a core target of the initiative. “There will be a project space for younger galleries on the first floor,” Martin says. “We have a 25-year lease, and we are keen to work with people who will build their business through this model.”

A similar idea is being developed in the Zaha Hadid-­designed luxury building adjacent to the High Line in New York’s Chelsea. Paul Kasmin is the first of 15 galleries to sign up to the all-inclusive complex. 

Another example is Condo, a co-operative exchange programme founded by Carlos/Ishikawa’s Vanessa Carlos in London last year that invites foreign galleries to take up residence in native spaces. It launched in New York last month (until 28 July). The goal, according to Nicole Russo of Chapter NY, who is spearheading the US leg with Simone Subal, is to build a network among galleries who participate in fairs but often lose money in the process. 

“The show is one month long, so it gives visitors, collectors and critics the chance to see things without the art fair rush,” Russo says. “And summer is traditionally a quiet period, so galleries are happy to be more experimental.” 

In total, 16 New York galleries, ranging from Bodega and Bureau at the emerging end to Metro Pictures and Andrew Kreps at the more established tip, will host 20 international dealers. 

Previous participants say the Condo model has been a success. Tom Cole, the co-director of Sunday Painter, says that during this year’s London edition, the gallery sold three out of four works by Emma Hart, priced between £4,000 and £12,000. They were part of a group show co-organised with the São Paulo gallery Jaqueline Martins, Seventeen from New York and London, and Warsaw’s Stereo.

“People are used to the art fair model and seeing lots of galleries in a short space and time,” Cole says. “The exhibition model has been neglected, and Condo addresses that.”

Installation view of Oliver Beer's Resonance Project Composition (Photo: Steven White; Courtesy Galerie Thaddaeus Ropac)
Making the leap to the next level

Sunday Painter is among a handful of emerging galleries to buck the trend. It is upsizing from now-trendy Peckham to a space in Vauxhall, due to open in October with a solo exhibition by the US artist Cynthia Daignault.

Exceptions in the middle market are few and far between. The Amsterdam-based Grimm Gallery opened a 3,300-sq.-ft space on the Lower East Side on 2 June, adding to two existing spaces in Amsterdam totalling 4,000 sq. ft.

Owner Jorg Grimm describes taking a lease in New York as “a risk, but one worth taking”. He adds: “For us it’s a long-term view, so we are treating it like a start-up. Amsterdam will support New York, and vice versa at some point.” His rent is $17,000 a month in New York, compared with $8,500 a month for the European spaces combined.

Still, it is tough to compete with multinational galleries at the top, which are also expanding their physical footprint. Galerie Thaddaeus Ropac now employs 100 people across five galleries spanning 11,000 sq. m, while David Zwirner employs more than 150 people and has more than 67,000 sq. ft of gallery space, recently adding a showroom on the Upper East Side that is due to open this autumn.

It is still too early to measure the commercial or critical success of alternative models in an increasingly splintered trade. As with other markets, art’s is cyclical, and galleries have always opened and closed. But stalwarts who are able to nurture artists’ careers long term are in the minority. According to the researcher Magnus Resch’s Global Art Gallery Report, 49% of galleries were founded after 2000, but a paltry 7% have been open for more than 35 years.

As Edward Winkleman, the co-founder of the Moving Image fair in New York, puts it: “The incipient gallery model is alive and well. It’s how both artists and dealers mature to the next level or simply don’t lose ground that seems to be the major challenge at the moment.”

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