For some New York galleries, signs of a slowdown came this past spring. As mega-galleries prepared their presentations for June’s flagship Art Basel fair, smaller outfits had noticed a troubling trend: their collectors were beginning to retreat.
In conversations with over half a dozen New York-based galleries ahead of this week’s edition of Art Basel Miami Beach, gallerists, overseeing programs of less than 20 artists, estimated that this year’s sales are down as much as 25 percent from 2022. The downturn has forced them to tighten budgets, pull back resources from artists, and have seen private collectors pull back from making new acquisitions since the spring. This year’s UBS Art Basel Report, published last month, echoed that finding, suggesting quietly that buyers weren’t planning to acquire new work in 2023 at the same rate they had last year.
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“We knew that sales were slowing here [in the US],” Sara Maria Salamone, the founder of a Queens-based gallery Mrs., told ARTnews. “We wanted to make sure that we also had our feet in another territory,”
While Mrs. opened in 2017, Salamone is participating in ABMB for the first time this year. She said she first noticed a slowdown in US sales this past spring, prompting her to present at Kiaf Seoul in September in an effort to find new collectors. Meanwhile, this year she received five requests from clients looking to privately resell work they’d purchased from her less than five years prior, after only receiving one such request in 2022.
Five other downtown New York gallerists, who asked to remain anonymous so they could speak about their businesses candidly, told ARTnews that they have seen once-regular collectors’ drawing back their acquisitions over the past year. One dealer, who opened a permanent space in 2016, characterized the drawback as a noticeable “drying up” of funding within the downtown scene. Some expressed uncertainty over whether or when collector-philanthropists might see financially supporting emerging practices as fashionable as they did during the pandemic.
When the world went into pandemic lockdown in March 2020, many gallerists feared how the resulting economic slowdown might impact their businesses. But as that year progressed, the pessimism appeared unfounded. Galleries closed deals at rapid rates, newly wealthy investors entered the gallery scene, and collectors rushed to buy up work by young and emerging artists. As a result, small galleries were able to expand their spaces and add staff. By last year, art sales were at $67 billion, up six percent from the pre-Covid year of 2019.
One dealer, who founded a New York-based gallery focusing on emerging artists in 2017, said that flush profits during the pandemic years had allowed her to expand her program to three spaces. Like Salamone, her business began to shift in April, she said, especially with American collectors: they have continued to privately inquire about artists on her roster, but have pulled back on buying despite advanced internal conversations. The dynamic has burdened her staff and left her program of eleven artists in a precarious position. “The U.S. has been abysmal compared to some of our other regions,” she said.
A Tribeca-based dealer, who started her gallery in 2013 and represents primarily multimedia artists, echoed others’ observation about a gradual decline in sales since the heady early days of the pandemic, describing it as “a balloon slowly losing its air.”
Three dealers interviewed by ARTnews, who established their galleries between six and eight years ago — two of which are participating in ABMB for the first time this year—said that they are taking a more cautious approach due to the subdued sales environment. During the pandemic, they expanded their operations, one opened a second location, and added staff to support the growing ambitions of their artists, all of which increased their overhead and the pressure on sales. With revenue plateaued, the dealers said they’ve had to make cold calculations about providing funds to their artists for studio support or covering higher production costs for complex exhibitions. The slowdown, they said, is increasingly affecting their artists’ practices.
One told ARTnews that since opening, the gallery had grown its operations every year for the past six years. “This is the first year the gallery hasn’t grown,” they said.
“It’s not an entirely new dynamic,” Renaud Proch, the director of Independent Curators International, told ARTnews, suggesting such pressures are cyclical. “Galleries adapt and artists adapt. But it points to the fragility of the support structure for artists.”
With weaker sales, the benefits of participating in a premier fair appear more elusive for small and mid-size galleries. At this week’s Art Basel Miami Beach fair, individual booths in the prestigious Nova, Positions, and Survey sections cost $11,000, $23,500 and $45,000, respectively, multiple participating galleries told ARTnews. Those figures, they said, amount to roughly half the total cost to execute their presentations. That total, according to two dealers, was still less expensive than participating in NADA Miami, the competing satellite fair that focuses on less-established galleries.
Dealers who spoke with ARTnews noted an imbalance at the fair: participants in Art Basel’s special sections typically feature work that is challenging conceptually and less commercial, making it harder to sell in a fair setting and requiring a heavier lift in educating collectors on the practice behind it. Some dealers went so far as to describe the dynamic with the large fairs as extractive: the fair needs emerging galleries to provide artworks with a critical edge to balance out the painting-heavy aisles and create an experience for its high-end clientele that feels less like retail. But some figures in the trade have said that the cost structure, which is higher for regular booths, makes it difficult to present newer artists with less established markets and disincentivizes some from proposing challenging work to selection committees at all.
“Smaller galleries are the ones on the ground identifying talent. From Basel’s perspective, they need the younger galleries,” Natasha Degen, chair of art market studies at the Fashion Institute of Technology, told ARTnews of the tension between emerging galleries and the fairs. “They need there to be discoveries.”
That dynamic has been noted by the biggest galleries. In a recent ARTnews interview announcing Hauser & Wirth’s “collective impact” partnership with Nicola Vassell, President Marc Payot described the current haves and have-nots ecosystem. “I came to the realization that the art world is in a state where the few very large successful galleries are becoming more and more successful and larger, and for the rest of the ecosystem, things are very tough,” he said. Meanwhile, in 2018, Art Basel implemented sliding-scale booth pricing to make the payscale between megas and small galleries more equitable; additional changes were introduced in 2021.
Some dealers are less weary of the costs. Nick Lawrence, who runs Freight+Volume in New York, told ARTnews that as a newcomer to ABMB’s Survey sector, he’s re-staging a censored 1990s performance by poet Karen Finley, a proposal that secured him a place at the fair after many years on the waitlist. Lawrence says he’s navigated two decades of “guerilla-financing” during other downturns to keep the gallery going. He estimated the total spend to attend the fair will cost $100,000.
Salamone, of Mrs., said that her decision to not expand last year has now put her in a more advantageous financial position to take risks. “I feel more comfortable bringing an artist that makes challenging work when I don’t have a huge overhead hanging over me,” said Salamone.
For younger gallerists, mostly in their thirties, they spend the first decade in business building their reputation. Participating in a major fair for the first time is part of that maturation: both a mark of approval and an access point to compete for a new clientele of major collectors and curators. Participating in the fair this week then, a few gallerists said, is important for the future of their programs, even if its sometimes difficult to measure how that investment translates into profits or institutional attention for their artists.
Throughout the rest of the year, certain dealers expressed the challenge of reaching what seems like a retracting audience. Some emphasized that gaining exposure for the artists they represent is non-negotiable, especially as their studio practices grow more complex. Isaac Lyles, founder of Lyles & King, who is participating in the fair’s Miami edition for the first time, told ARTnews that he decided to bring works by Aneta Grzeszykowska, 49, and Catalina Ouyang, 30, whose practices span morbid and animalistic themes, because he wanted to create an “institutional level” presentation that ventures into uncomfortable territory. “It warrants a bigger audience in the U.S.,” he said.
After the fair concludes, some dealers expect the challenging landscape to continue. Even more established gallerists told ARTnews that prolonged negotiations and a slower sales environment in New York over the past six months have grown arduous.
“This can’t be sustainable,” Wendy Osloff, the founder of longtime downtown gallery PPOW, told ARTnews of the pandemic-era buying rush. That period, Osloff explained, saw more competition among collectors, creating long-waiting periods for them to privately acquire new work by a single artist. Osloff, who founded PPOW in 1983, sees the current environment as a normal, but painful part of galleries’ lifecycles.
Retaining patrons, she said in a bit of advice to her younger peers, is a difficult long game. “You do not educate people in five days, which is the length of an art fair and you do not educate people in 45 days, which is the length of a show,” she said. “It takes decades.”