The art of a recession: Gallery owners struggling

[clickhere-migration]

Without being Chicken Little and the sky is falling, is this affecting the comic art community, or are we a bit more insulated due to the fact that all of the major dealers don't have brick and morter galleries??

 

The art of a recession: Gallery owners struggling

 

Would love to hear some honest market reports coming out of San Diego.

 

START OF ARTICLE

 

SCOTTSDALE, Ariz. – Art gallery owners across the country are finding they have a tough sell these days.

 

With houses going up for auction, unemployment continuing to rise and the threat of layoffs seemingly ever-present, many gallery owners in art communities such as Scottsdale, Ariz., Santa Fe, N.M., Portland, Ore., and New York City are closing shop, going broke to stay open or drastically changing the way they do business.

 

"Art is a very discretionary sort of object, and we are in the worst recession arguably in the postwar era," said Jay Bryson, a global economist with Wells Fargo Securities in Charlotte, N.C. "Obviously somebody who has lost their job in a factory in Indiana probably is not buying art."

 

Even people with plenty of discretionary money aren't spending much on it.

 

"You're a billionaire and you took a 40 percent hit on your portfolio, now you only have $600 million left," Bryson said. "That's still pretty deep pockets, but 40 percent is 40 percent."

 

In the gallery district of downtown Scottsdale, at least a half dozen galleries have closed in the past year or are in the midst of closing. Others still are wondering how much longer they can make it.

 

One recent day, Leslie Levy sat quietly amid the contemporary art she sells in her gallery, which was just as deserted as the streets outside, where the temperature was in the triple digits.

 

The summers here are always slow because of the heat, but this one is much worse than usual. That's partly why Levy is closing her doors at the end of August after 32 years in business and becoming a private art dealer online.

 

"I'll tell you what — if I was younger, I'd just keep at it knowing we've not seen times quite as bad as this before," Levy said.

 

Longtime customer Marylyn Gregory of Bernardsville, N.J., came in the gallery that day to see it one last time and check out what pieces Levy had left of her and her husband's favorite artist. Gregory told Levy she was surprised and upset when she heard the gallery was closing but added, "You're probably doing the right thing."

 

Gregory didn't end up buying anything that day, saying she needed to check with her husband. Before, she might have been more spontaneous.

 

"Sometimes you'd go to an opening and have a glass of wine, and you're like, OK," she said. "It's certainly the method to get everyone to open their checkbooks."

 

But like many other art lovers, the Gregorys are more conservative with their money these days.

 

Levy understands. "People are watching what they spend — cutting back and spending on the necessities of life. That makes sense to people."

 

Becky Smith knows that all too well. She owned the Bellwether Gallery in Manhattan's Chelsea neighborhood for a decade, but closed at the end of June after watching her revenue plummet to $80,000 gross in the first quarter of 2009. She had $40,000 net, and $10,000 of it went to rent each month.

 

The $80,000 figure was down from about $350,000 the same quarter in 2008 and about $600,000 during that period the year before.

 

"I was really startled," Smith said. "It was the spring of '08 where I saw three shows that should have been blockbusters underperform, and I was in shock.

 

"Things were booming so intensely a couple years ago and the pendulum has swung so far in the opposite direction, it was impossible to know where I stood," she said. "And I didn't want to be paying for a storefront while I was figuring it out."

 

In the past two years, at least 24 galleries have closed in Manhattan, mostly in Chelsea, according to New York City-based Artnet magazine, which covers the fine art world. "That's really dramatic," said Artnet editor Walter Robinson.

 

In Santa Fe, N.M., between 10 and 15 galleries have closed this year, said Christy Walker, managing director of the Santa Fe Gallery Association.

 

"A lot of people have this idea that running a gallery, the owners make a lot of money, when it's just a lot of effort to make a living off of it," she said. "It's a hard business to be in, and when things are good, things are good, and when times are tough, it's a really tough business to maintain."

 

Kraig Foote of art one gallery in Scottsdale has done everything he can think of to avoid shutting down.

 

His house is about to go up for auction because he hasn't made a payment in seven months, he has laid off his two employees and he has resorted to selling his own beloved art collection for a fraction of what it's worth.

 

"I have given up everything," he said recently in the very empty gallery, which sells work by local high school- and college-age artists.

 

And still, the threat of closure looms.

 

"I'm trying to make it to December," Foote said. "I think people will start spending again once they get to the next holiday. They'll say, 'We've saved, let's get something.'"

 

He paused. "I don't know."

 

[delekkerste]

Without being Chicken Little and the sky is falling, is this affecting the comic art community, or are we a bit more insulated due to the fact that all of the major dealers don't have brick and morter galleries??

 

Welcome to Recession Art Club.

 

The first rule of Recession Art Club is: you do not talk about Recession Art Club.

 

The second rule of Recession Art Club is: you DO NOT talk about Recession Art Club!

 

Third rule of Recession Art Club: if someone yells "prices are falling!", says he bought a piece for a huge discount off of summer 2008 prices, says he sold something at a loss or couldn't find a buyer at all, or says he and others are tapped out, the thread is over and the poster's name goes on the blacklist.

 

Fourth rule: only two posts by a doubter before everybody else must pile in and talk about the BSDs still paying top dollar (all behind the scenes, of course).

 

Fifth rule: High dealer asking prices shall be deemed a reliable indicator of the strength of the market. Trade deals shall be considered the equivalent of all-cash deals. Offers that are not accepted and reserves that are not met shall be considered as good as real deals if the prices are high. Any "deals" seen on eBay, Heritage or any other public sales venue where up-front cash is required shall not be considered as reliable as private deals, especially when an unbiased dealer is involved.

 

Sixth rule: No talk about the recession because nostalgia always trumps finances. In fact, there is no recession. Besides, the laws of economics do not apply to comic art anyway.

 

Seventh rule: A piece will stay at its original inflated asking price for as long as it has to.

 

And the eighth and final rule: if this is your first time at Recession Art Club, you have to buy something.

[heartened]

Without being Chicken Little and the sky is falling, is this affecting the comic art community, or are we a bit more insulated due to the fact that all of the major dealers don't have brick and morter galleries??

 

Welcome to Recession Art Club.

 

The first rule of Recession Art Club is: you do not talk about Recession Art Club.

 

The second rule of Recession Art Club is: you DO NOT talk about Recession Art Club!

 

Third rule of Recession Art Club: if someone yells "prices are falling!", says he bought a piece for a huge discount off of summer 2008 prices, says he sold something at a loss or couldn't find a buyer at all, or says he and others are tapped out, the thread is over and the poster's name goes on the blacklist.

 

Fourth rule: only two posts by a doubter before everybody else must pile in and talk about the BSDs still paying top dollar (all behind the scenes, of course).

 

Fifth rule: High dealer asking prices shall be deemed a reliable indicator of the strength of the market. Trade deals shall be considered the equivalent of all-cash deals. Offers that are not accepted and reserves that are not met shall be considered as good as real deals if the prices are high.

 

Sixth rule: No talk about the recession because nostalgia always trumps finances. In fact, there is no recession. Besides, the laws of economics do not apply to comic art anyway.

 

Seventh rule: A piece will stay at its original inflated asking price for as long as it has to.

 

And the eighth and final rule: if this is your first time at Recession Art Club, you have to buy something.

 

Ah, Gene, you've finally come around! Welcome to the Club

 

[NightGallery1]

Gene, thanks for giving me a little chuckle today.

 

Some time back I made the observation that prices may have started to soften somewhat. I was a little surprised by the response to my suggestion... particularly some of the emails I received. One person even said I was making irresponsible remarks that were harmful to the hobby - I didn't realize that I had that kind of influence. In all fairness, a few of the posters that contacted me were very pleasant... just wanting to shoot the bull about our similar taste in art and the hobby in general.

 

Having said that, I think it's only natural that the price of collectibles (especially those in the low to mid-range category) would be negatively influenced by the economic downturn. Although those who can afford to spend six figures on a piece without blinking an eye (i.e.doctors, lawyers etc.) are much more insulated and less affected, so I'm not surprised that 'some' big deals are still going on behind the scenes... but the average joe? I'd be willing to bet that the heavy hitters make up a relatively small portion of collectors in the hobby.

 

Those amazing splashes and covers displayed at ComicCon are like peacock feathers. They do serve to attract people, who may in turn purchase something else. But really, how many here can afford to plunk down $125,000 (or even afford to make a trade/cash deal) on that Ditko Spidey splash? - besides, his mask is completely blocked and his buttocks are front and center (not that there's anything wrong with that). All kidding aside, it would be a grail in anyones collection, but for that kind of crazy money I'd lean more toward the Doc Strange splash, a top notch Flash Gordon Sunday and/or a Little Nemo in Slumberland Sunday.

 

One other thing - in the last couple of months I've contacted quite a few people who had expressed interest in buying different items from my collection. You know... "If you ever decide to let this go....". Well, not a one of them came through. Those who did respond had a variety of reasons for not buying - "I'm out of a job.", "I just made a big purchase.", no response, or in one case, the offer was ridiculously low. Keep in mind, my collection doesn't consist entirely of comic art.

 

I may be wrong, but that last experience is another reason I believe pop culture collectibles have been taking a hit.

 

Just one mans opinion, so please put the rocks down.

 

-Bill

 

 

 

 

[CollectingFool]

Would love to hear some honest market reports coming out of San Diego.

 

Well, I was all ready to comment on this but Gene not only hit all my points, he did it funnier than I would. I'll just make it short and say very rarely will you get an accurate account of market conditions on a public forum because you have people with agendas on both sides. If someone is honest, his comment will get drowned out. Unless you're a close friend of a dealer that you know talks to you honestly, you won't find out what's really going on.

 

 

 

 

[Artemaria]

very rarely will you get an accurate account of market conditions on a public forum because you have people with agendas on both sides. If someone is honest, his comment will get drowned out.

 

This bears repeating. It is a maxim that holds true for a great many threads.

 

- A

[mtlevy]

Hard to tell what situation was at San Diego--to a large extent the asking prices were so high I would have been stunned if the art had flown off the walls!

[DStorm]

The thing that kind of stunned me was the massive mark-up on some of these items at comic-con. Some of the "regular" advertisers at CAF had their art marked way up from what they advertise on their sites. Are they just hoping some money bags walks by and just HAS to have that piece? I think it's just a shady business practice, if you ask me. Do they think no one will notice? It really makes them look bad and it makes me not want to buy from them at all when I see something like that. I saw a cover on XXXXXX site for $3500 but at comic-con it was $6K. And that piece has been sitting on that site for a couple years at $3500! Why would you raise it to a ridiculous amount like that when at $3500, sitting for years, it's obviously over-priced? Shouldn't he be lowering it?? Nothing worse than stale art.

[irchooker]

It's not cool, I'll give you that. But the thing is, not many people in this hobby truly stand by the assertion that they will never do business with someone else; there is always the 'one of a kind' caveat. Don't dare burn a bridge.

 

There are rookies who bring artwork to SDCC every year and get snookered, or people out of the loop that like to do trades. I'd guess that was the trade or cash/trade price for someone who doesn't monitor every website once a week.