With Chelsea growing increasingly expensive, Tribeca has seen a recent influx of galleries, joining stalwarts such as Andrew Kreps and Postmasters, and newcomers are learning from the experiences of their forerunners. “You can’t do this by yourself,” says Robert Dimin of Denny Dimin Gallery, which has opened a larger space in Tribeca after six years in the Lower East Side.
Resource-sharing has facilitated the Lower East Side’s growth over the past decade, but Dimin says it was more “peer-to-peer” with most spaces being relatively new to the market. It was also the area hardest hit by the market’s recent contraction—between 2016 and 2017 around two dozen small- to mid-sized galleries closed.
Newer dealers in Lower Manhattan have found valuable support from those who have weathered the shifting scene. Becky Elmquist, of the two-year-old gallery Larrie, says she received guidance from Jasmine Tsou, who helped her with skills such as writing consignment agreements while introducing her to collectors and brainstorming business ideas. [Tess Thackara on Mid Market Galleries]
The superstar phenomenon is pervasive in the art market. My research of the last few years has documented the increasing dominance of the top end of the market. A very small number of artists, and the galleries representing them, drive the bulk of sales value, while others struggle to survive. While this top-heavy bias has increased over the last 10 years, the superstar effect has been observed for at least a century. In his 1920 book Principles of Economics, British neoclassical economist Alfred Marshall wrote: “There never was a time at which moderately good oil paintings sold more cheaply than now, and there never was a time at which first-rate paintings sold so dearly. A business man of average ability and average good fortune gets now a lower rate of profits on his capital than at any previous time; while yet the operations, in which a man exceptionally favored by genius and good luck can take part, are so extensive as to enable him to amass a huge fortune with a rapidity hitherto unknown.” [Clare McAndrew on Superstar Galleries]
In 2018, less than 5% of dealers accounted for 50% of the sector’s sales. Dealers in the two lowest brackets of annual turnover, sub-$250,000 and $250,000 to $500,000, saw sales decline by 18% and 4%, respectively, while dealers in the two highest brackets, $10 million to $50 million and $50 million-plus, saw their sales increase by 17% and 7%, respectively. This uneven growth has been a subject of concern and conversation across the industry in the past year. Combined with anxieties over Brexit, the trade war between the United States and China, slowing global growth, and a sense of political uncertainty, it contributed to a general feeling of consternation within the industry about the immediate future.
McAndrew said this apprehension reflects a general level of macroeconomic uncertainty to which smaller galleries and those that haven’t modernized their business practices are especially vulnerable.“Those older business models are not working as well as they used to,” she said. “The market is fundamentally changing and the macro environment that people are working in is unpredictable.” McAndrew added that, among the roughly 6,500 dealers who responded to the survey on which the report’s data on gallery sales is based, many noted feeling that they had been fortunate to come out of 2018 in the black. [Benjamin Sutton on the Global Art Market]
… gallery owners and other art professionals say the mega model makes sense, particularly when the contemporary art market itself is so strong, with multimillion-dollar sales of individual works becoming everyday affairs.
The idea, said Magnus Resch, a specialist in art economics who teaches at Columbia University, is for the galleries to reflect the booming nature of the business.
“Every collector wants to buy museum-quality art so the galleries say, ‘Let’s just show it to them in what looks like a museum,’ ” said Mr. Resch.
West Chelsea is the logical locale for such galleries, owners and art professionals add. For starters, the neighborhood has a long history as a gallery hub, even as it has become equally defined in recent years by towering high-end residential developments and the tourist-friendly High Line elevated park.
… Still, the West Chelsea area has its doubters in the art community, many of whom say the neighborhood has become too commercialized and touristy. Indeed, several gallery operators have moved from West Chelsea to Tribeca for such reasons. [Charles Passy on Chelsea Gallery Scene]