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THE PARTY IS OVER

Art-fair organisers and art dealers are struggling to make their businesses sustainable, writes Faith-Ann Young. The industry has entered an existential moment: what it will take to survive?

Special to MORE INTELLIGENT LIFE

The period between 2002 to 2008 can be described as "the era of the art fair". As the economy rebounded from its dip in 2001, fairs began popping up on the international calendar as playgrounds for the wealthy and creative. Investment banks such as UBS and luxury brands such as Krug and Gucci joined the frenzy, sponsoring gift bags and open-bar events amid the million-dollar price-tags. Travel agents offered special worldwide packages, enabling easy fair-hopping from September through December each year.

But as the financial crisis clouds market predictions in 2009, art-fair organisers and art dealers are struggling to make their businesses sustainable. The industry has entered an existential moment: everyone is asking themselves what will it take to survive in this new, more competitive market.

Robert Curcio, a member of the founding team of Scope Art Fair who now works on his own company Curcio Projects, believes this decline was inevitable. "There are too many fairs, too many things to go to," he explained to me. "Even in 2007, collectors were beginning to skip fairs. There has been this general fatigue for some time now, regardless of the economy."

At London's Frieze Art Fair in October 2008, dealers were already nervous and buyers hesitant. Then New York's winter auction results were disappointing. Christie's contemporary art sales totalled $113.6m, half the pre-sale estimate of $227m.

With stiff upper lip, Art Basel Miami Beach (ABMB), Art Basel's flamboyant sister, went on with the show in December, just days after America's Bureau of Economic Research officially confirmed that the country was entering a recession. Most galleries had to price-slash and coddle collectors to confirm sales. According to the Miami Herald, approximately one-fifth of the galleries reported numbers that were down at least 30% from 2007. Gerd Harry Lybke of Eigen+Art said that he sold 80% less than last year (despite offloading Neo Rauch's "Der Altar", 2008, for "well over" $100,000, along with a painting by Tim Eitel), according to Art Review.

Overall sale results were hardly catastrophic, but there was a general sense that the party was over. Buying art suddenly felt like "buying ice cream in winter," observed Adam Lindemann, a collector, at a dinner party hosted by the Accompanied Literary Society and Assouline, a publisher. Galleries are folding, artists are suddenly looking around for more stable work.

Fair organisers are starting to respond. The Armory Show in New York, which took place in early March, set a promising precedent. After the poor results at Frieze last year, galleries warned that they were dropping out, deterred by all the usual travel expenses, entrance fees and shipping costs. (The costs of participating in a big fairs can reach $80,000-100,000.) The Armory responded by offering to negotiate on payment of fees, and several galleries settled for smaller booths or shared space with another gallery.

As a result, this year's Armory actually had more exhibitors than last year (177 for the contemporary section, plus 68 exhibitors in the modern section, compared with 160 total in 2008). Fair organisers also created a more flexible payment scheme this year, explained Giovanni Garcia-Fenech, the Armory's communications manager. Exhibitors could pay their fees over several instalments, rather than in two lump sums as in previous years.

"Things went much better than anyone expected,” reported Garcia-Fenech. “Sales were strong and steady, and yes, the mood was quite cheerful.” As of March 10th, attendance was estimated at 56,000 (up from last year’s 52,000). The fair even expanded to include the new 30,000-square foot Armory Show-Modern, owing to plans made before the change in the economy. "We are pushing for the Armory Show to be the leading art fair," said Garcia-Fenech cheerfully, though he acknowledged that the top fair remains Art Basel.

Galleries now feel pressure to adopt lean, cost-efficient fiscal strategies. "We are planning on having exhibitions last longer, between six and eight weeks, in order to ensure more people see the exhibitions," ventured Javier Peres of Peres Projects, a gallery in Los Angeles and Berlin. His gallery will host fewer shows and attend fewer fairs, and will renegotiate all associated costs: "the fair, shipping, hotels, everything!"

This seems to be what all gallery owners are doing. James Fuentes of James Fuentes LLC, in New York's Chinatown, also plans to participate in fewer art fairs. "Last year we did five and this year we will probably do two. We are more judicious in our choices--we want to do art fairs with excellent reputations that are also a good fit for our specific programme." He added that his gallery is "more aware of the importance of negotiation in both our acquisitions and sales."

The economic upheaval has also changed the way people are buying art, observed Alex Gray of Alexander Gray Associates, a gallery and advising firm in New York's Chelsea art district. "In recent years, all has been focused on the financial return of investment," he said to me. "Now I predict the emotional and intellectual will take a bigger piece of the pie."

Curcio, who consults for galleries and artists, echoes this optimism. He predicts the change in the economy will have a positive impact on emerging artists and new approaches. "You will start seeing all these different ideas on how to do an art fair and roving galleries," he suggested. People will begin thinking "on a new creative scale."

This year may prove to be a better time than ever for art lovers with disposable income. Kathy Battista, director of the Contemporary Art Programme at Sotheby's, mused, "It's a great time to get a good deal. It's a buyers' market."

Picture credit: Kelsey Keith

(Faith-Ann Young is a writer and photographer based in New York.)