Tuesday, December 16, 2008

Opportunity Favors the Prepared : Open Thread

There's a meme in the art world that's been floating around for some time now. Essentially it suggests that the more global the art market (indeed... the entire art world) goes, the less feasible it becomes for Mom & Pop shop-style galleries to compete and/or survive. This was before the global economic downturn. It's been suggested on this very blog (by George, if memory serves me right) that, like in any other industry, collaboration, if not consolidation, will eventually become necessary. The example most often cited when this idea crops up is the LVMH fashion and luxury company model. Serving as the umbrella corporation for about 60 sub-companies that run more-or-less autonomously, LVMH fashion companies include Louis Vuitton, Fendi, Donna Karan New York (DKNY), and Marc Jacobs to name but a few.

The beauty of this model is that global competition requires certain costly expenses, but that some of them can be centralized to save each sub-company (through bulk purchases or group discounts, perhaps, or retaining certain expensive experts at a better rate). How this could work for galleries, I'm not so sure actually. There are a few fundamental differences between how a commercial art gallery and how a fashion design company run that make this example an imperfect template, obviously, not to mention that, as one influential young art dealer I talked to about this idea in Miami noted, "Many art dealers can't stand each other."

That may be the case, but in reading the article in today's New York Times about how the Brooklyn Museum and the Metropolitan Museum will be sharing the Brooklyn Museum's world class costume collection, it became apparent that such concerns are not always the determining factor:
Still, it will formally retain a separate identity of sorts: it will be known as the Brooklyn Museum Costume Collection at the Metropolitan Museum of Art.

“Clearly this was a hard decision to make, since it is a highly important part of our history,” said Arnold L. Lehman, the Brooklyn Museum’s director.

But he said the cost of maintaining the costume collection, much less showing it, had been a major concern for him since he was hired as director in 1997.

“Costumes are the most fragile, the most difficult and the most labor-intensive objects that an institution can own,” Mr. Lehman said. “Although we have sustained and grown the collection over the years, we do not have the existing resources to make the kind of use that we will be able to make now.

“This is not just a transfer but a partnership. We can draw upon it in a way we were never able to before.”

Mr. Lehman said that under the deal the Brooklyn Museum would be able to include the collection in shows, and that both museums planned to present exhibitions in 2010 focusing on different portions of the combined collections.
Two parts of that interview with Mr. Lehman stuck with me after I read it. First is that he acknowledges that the decision was difficult, but that financial realities led this to be a better choice for the collection (the Met has the funding to conserve it). Second, by both museums viewing the deal as a partnership and maintaining the original name of the collection, the identity of the collection is preserved for the most part. In the end, as difficult as this must have been, it seems the responsible decision: it protects the collection, it pays proper homage to how it came to be, and most importantly it ensures the public will have access to the collection moving forward.

So, back to our Mom & Pop shop question. The larger galleries (those with multiple locations and multiple directors) more or less emulate the LVMH model to some degree already. There may be less autonomy for their directors than Donna Karen enjoys, but they've managed to maximize their resources efficiently through specialization and strategically placed distribution outlets. Many of their directors will break out and start their own eponymous galleries one day, but while they work for someone else, they have the freedom to focus on their part of the overall program and build their artists' markets without too much distraction from the overarching concerns that weigh down the owner/directors of smaller spaces.

I could go on, but my point is simply that spending time on the more mundane tasks or concerns is not the favorite part of the job of any dealer I know. Most dealers wouldn't miss worrying about some parts of the business and might welcome ideas that spread such distractions around. In New York, in particular, the single biggest overhead expense and most pressing concern in the current economic situation for most young, small galleries is their rent. In the past, all kinds of models have been tried to share this expense (trading off shows in the same space, art mall locations, etc.), but it's difficult to promote a unique vision from a cubicle (or so the argument often goes, but in truth some of my very favorite gallery programs exist in odd little rabbit warren-like spaces) or to maintain consistency if you're too nomadic.

New York would seem to have a confluence of interesting opportunities at the moment, though. On one hand you have a city in which new spaces built to be condos are seeing enough units go unsold that developers are temporarily renting them out instead. On the other hand, you have young dealers who could used a break in their rent until the market picks back up again. What's needed is for some developer who understands that the rich international collectors who would visit a destination gallery location (some space with 10-15 strong young galleries) are precisely the clients they'll want to be marketing their available condos to, and what better way than by having them continuously visit the location? Yes, that would mean the galleries would be moving out again in a few years when the economy picks back up, but that seems a less drastic and more autonomy-preserving step than some of the other models.

It's obviously too early yet for most galleries to go through all this trouble, and, of course, no developer has yet stepped up to offer such a deal, but the economic outlook suggests we'll have plenty of time to brainstorm on such matters over the coming months. Opportunity favors the prepared. Other ideas on this?

Labels: art market


Blogger Donna Dodson said...

Great post, Ed, and timely since we just visited the West Collection in Oaks, Pennsylvania yesterday morning. What they do to engage dialogue and ownership of the collection is pretty amazing as well as dialogue that creates branding of the collection. They told us that they mostly buy from art fairs, and once it enters the collection, it goes into an art mart where it is hung in a hallway for employees to select art that they want hanging near their cubicles- and then there is a hot zone for art that has been hung on campus where the employees asked to have it taken down- they made me think a collector is as specific about what the identity of the work is in the collection as any body of work that an artist makes- and they curate thematic shows in their space- it is located at SEI investments and worth a trip.

12/16/2008 09:24:00 AM  
Blogger Aaron Wexler said...

Speaking of boutiques (or mom & pop shops), I think the LES galleries are in such an interesting position right now. They are all independent and funky (yup, I used thew word funky) but in a way a choice to move there or open there is a choice to be all under a specific umbrella... and they definitely all need each other (which is a contradiction to being independent... or is it?). And talk about condo realestate development sharing the same space - wow!.
Side note about the fashion designer point: Many designers end up selling their names. For example Jill Sander sold her name to Prada.

12/16/2008 09:38:00 AM  
Anonymous EBriel said...

The idea of "chain galleries" or gallery franchises/groups has been explored in Asia in recent years.

One example is Osage here in Hong Kong. They also have locations in Beijing and Singapore, to capitalize on the craze for mainland Chinese art: http://www.osagegallery.com/

A young Bangkok-based gallery I particularly like recently opened a branch in Singapore: http://www.lalanta.com/
but it's not appearing yet on their website.

It could work well if there was enough autonomy involved for the gallerists - or if the "group" was backed by investors rather than gallerists.

12/16/2008 09:41:00 AM  
Blogger nina said...

I agree about the empty condos and the benefits a developer could draw from making a deal with galleries. I actually think many commercial landlords need to adjust their thinking as there is a lot of inventory and the economy does not seem set for a quick recover, while property taxes are on the rise once again. Neighborhood communities should also be interested in this and encourage it, as empty retail/buildings are not good for communities.
I also think that for emerging artists/curators/collectives this is a great oppurtunity to showcase work in temporary settings.
And of course the internet is key! What a great almost free tool for promotion that also allows one to sell work beyond a show.

12/16/2008 11:02:00 AM  
Blogger George said...

Random thoughts between my second and third cup.

The biggest factor in fashion is financing, funding production for spring and fall. Fashion conglomerates keep production on schedule by financing the designer/artist who is the source of it all.

If we are just considering the commercial gallery system, the art world functions with a different hierarchy.

The problem with the art world is that the money is concentrated in the wrong place.

What does it mean when we read that a collector, who knows a bargain when he sees it, spends eight million dollars on a handful of artworks at the latest auction? Divide eight million by four hundred.

The commercialization of the art world creates a perverse demand for product forces many of todays artists to become product designers rather than visual poets. Compare Joseph Beuys with Richard Prince. Honestly, I cannot even remember a single piece from the current Prince exhibition at LG, kerchunk, kerchunk, kerchunk. Whatever idea was there at the start has been diluted to faint transparency. Cecily Brown too.

But, I think this is ok, everybody can wear AIX.

But, could I have a poetic alternative please? This is where the young gallery, the one with vision, excitement, questionable taste, and chancing failure can bring new art into visibility. It is something the corporate galleries cannot do.

12/16/2008 11:20:00 AM  
OpenID deborahfisher said...

Poets need patrons. You're right George that the economic model that creates poets is different than the one that creates product, and it's interesting to wonder aloud what that model is.

The thread, Ed, is a good one.

12/16/2008 11:53:00 AM  
Blogger Bromo Ivory said...

I like your idea about renting to young galleries - creating the market for the upturn - not entirely unlike the model some cities use to "revitalize" some areas - though in Manhattan a unique opportunity exists where you can get a desirable zip code and preserve/increase value!

12/16/2008 02:35:00 PM  
Blogger Joanne Mattera said...

Correct me if I'm wrong, but isn't this the art fair concept: one organization functioning as an umbrella for many galleries--whether big-ticket dealers or smaller ones, depending on the venue? Is there a developer or entrepreneur who could take on a gallery project in New York? (One who wouldn't turn it into a high school popularity contest?)

Alternatively, if we're talking specifically about smaller galleries organizing, perhaps the non-profits are the model. The Elizabeth Foundation, for instance, has been providing low(ish)-cost studio space to artists for years.

And what makes you think the fashion designers don't hate each other?

12/16/2008 02:36:00 PM  
Blogger George said...

The "art fair" is just another trade show, all industries have them, photography, gifts, electronics etc.

The art industry has too many art fairs, the organizers are going to have a hard time making a profit off of galleries with shrinking sales and the number of "art fairs" will taper off over the next few years. It was a bubble product that served its purpose but I think there might be better models for this sort of thing.

Most of the chain (franchise) galleries I've been in are rather dreadful, they have to sell established artists like Dali and Warhol, they cater to popular taste but rarely establish it.

12/16/2008 04:11:00 PM  
Blogger Pretty Lady said...

What's needed is for some developer who understands that the rich international collectors who would visit a destination gallery location (some space with 10-15 strong young galleries) are precisely the clients they'll want to be marketing their available condos to, and what better way than by having them continuously visit the location?

I thought of this, generally, several years ago. The connection between art and real estate values has been painfully obvious to me for the last two decades, since I'm one of the artists who moves into a ghetto, starts an 'alternative artspace' and establishes a studio, then is priced out of the neighborhood in 2-5 years because the art has attracted hipsters, which then boosts real estate values.

So I thought, well, why not capitalize on that? I put together an experienced team which included an event planner, an accountant, a business adviser and a creative director, and we created a proposal for bringing artists into fallow real estate, on a temporary basis, to help the artists with exposure, and the real estate owners with marketing their spaces to desirable tenants. They'd also get a tax deduction, since the artists would function as a non-profit organization. We presented this proposal to various arts organizations, businesspeople, lawyers and real estate investors.

Silly me.

Because our proposal explicitly pointed out that, since artists were creating a positive economic benefit for arts organizations, businesses, and real estate investors, we deserved to get PAID for it.

That didn't go over very well. Not only are artists expected to work for free, but economic ecology is BASED upon the fact that artists work for free. Who was I to challenge my position on the economic food chain? Off with her head!

I suppose I might have had more success if I weren't an artist first, and a businessperson solely out of exigency. Regardless of the reasons, I found that I, personally, was not up to the task of singlehandedly altering deeply entrenched economic paradigms. I'm off to get my real estate license, now.


12/16/2008 04:53:00 PM  
Blogger Mike @ MAO said...

Interesting thought Ed..

I guess the problem being.. it's hard to do these things when everybody is loosing money, going out out, and times are difficult.

But I think to some degree it's already happening.

For example.. Christies investment in the gallery Haunch of Venison.. and The Chicago Mart's (it's parent company is Vornado Realty Trust, one of the biggest and smartest real estate companies in the world) purchase of all these art fairs.. So, maybe it's the start of what you're talking about.

Someone should suggest The Chicago Mart people start investing in art galleries to "anchor" their art fairs.

12/16/2008 05:24:00 PM  
Blogger George said...

Pretty Lady says "Silly me."

Her comment pretty much puts to rest the pollyanna ideas wafting around.

12/16/2008 05:58:00 PM  
Blogger Mat said...

They tried this in Santa Monica - it works - it is called Bergamot Station, home to Patrick Painter Gallery and many other big name galleries. Marcel Dzama had his first solo show in the U.S. there at Richard Heller Gallery, one of a hundred historically notable shows there in the past 14 years.

12/17/2008 04:21:00 AM  
OpenID deborahfisher said...

I don't know, George. I'll play Pollyanna. NO disrespect to PL intended, but I am immediately suspicious of arguments that revolve around a goal that's im possible for an artist, but is possible for a non-artist.

Business is a dance in which a lot of people are looking for someone to not pay. Anyone, artist or no, who's not punching a clock has been pushed into an offensive deal and either worked through it or rejected it, as PL rightly did above.

That state of affairs, in which people are often cheap and predatory and this is overcome through dusting yourself off and living to deal more savvily another day, is only worse for artists in the artist's own mind.

I think it's important to have boundless negative capacity, and to see clearly all the things that can and do go wrong. But it's also important not to lose sight of one's capacity for dreaming, and to continue to be optimistic in the face of you know, the fact that people suck sometimes, and raw deals are laid on tables, etc etc.

Improbable things happen all the time, but only to the tenacious and open minded people who never blame themselves and never put a fork in anything.

12/17/2008 06:44:00 AM  
OpenID deborahfisher said...

Mat, that's how Bergamot Station started?

I did not know that...

12/17/2008 09:46:00 AM  
Blogger George said...

Bergamot Station is essentially an art mall. In Chelsea some of the multi-story, multi-gallery buildings function in somewhat the same way, nothing new here.

I can see how the use of unrented spaces might be an option for a guerrilla gallery of some sort. This is a very short term option which can only provide a temporary solution to the problem.

I read something the other day which stunned me, the world population has doubled since 1969. I think this has a lot to do with the various booms and busts we've had lately. Whatever the case, the art business has reached an economic critical mass and will not collapse back down to what it was before.

Further, along with this increase in size, revenues and cash flows must have increased dramatically, some major galleries may have raw number sales figures approaching those of the the auction houses or something approaching a half-billion dollars annually.

Art has become a major retail luxury business. Business is business.

Since we are all artists, I know we all have opinions about what we see in the galleries, the stuff we love and the stuff we hate. As this market grows larger the real problem is finding enough product for fill the pipeline at all price levels. (Sounds gross huh?)

Whatever, this might make some form of partnering between larger more established galleries and younger start-up galleries a viable proposition. If a auction house can partner with a major gallery the synergies only occur at a level where the artists are already established enough to have a price-history which meets the market requirements of the partnership.

The problem is that most artists need time and exposure to get to this position within the marketplace. A second problem can occur when the younger gallery fears loosing an artist, that it has invested time and money in seasoning and promoting, to a larger more established gallery with deeper pockets

A partnership between a corporate type gallery and a younger start-up gallery(s) might function a bit like off-broadway or the farm-teams in baseball. Both galleries would share in the profits and risks of exposing and promoting the new work. In addition, the established gallery would also have access to another curatorial perspective.

12/17/2008 11:01:00 AM  
Blogger Pretty Lady said...

Actually, George, I agree with Deborah. Notice that I came to the conclusion that I, personally was unable to change the paradigm; there's no reason why it can't be changed by a group of artists with more connections, more determination and more organization than I had.

Basically, I just bit off more than I could chew. I thought that simply presenting a good idea in a competent manner should be enough to garner support, particularly from organizations whose mission is to support artists. I was blind to the political, territorial and economic issues involved, and I also just didn't know enough people.

I think it's important to maintain optimism while being realistic about one's personal limitations. I wouldn't rule out getting involved in such a project again, but my laundry list of tangible resources would be a lot longer before I'd throw so much energy into it.

12/17/2008 12:01:00 PM  
Blogger highlowbetween said...

Good post and great topic Ed. I often dream that there should be come kind of forum for revenue sharing to offset costs related to rent, transportation and marketing. Something that would allow for small market "teams" to remain good at what they do and also allow the bog boys to remain "big". It's professional sports model of course, and very dependent on being excluded from anti- trust laws which keep out competition from other leagues, etc. However for a specific city, there might be room to explore the idea on a regional or municipal level. I think going for a banking model of consolidation - "the too big to fail" myth creates bigger problems down the road.

12/17/2008 05:03:00 PM  
Anonymous Justin said...

Red Ink Studios in San Francisco was/is able to convince building owners to let artists "squat" in vacant commercial spaces. After the dot-com bust, it was easy for artists to approach these owners with a simple proposal: you have empty space that isn't generating any income, let us put in artists' studios and hold exhibitions for free/extremely reduced rent to attract attention and potential clients. When the lease is filled or the building sold, we will move on. The owners didn't lose much if anything, and some of the spaces have now been occupied for years.

Perhaps there is evidence of other similar organizations who have used economic weakness as creative strength?

12/17/2008 09:23:00 PM  
Anonymous Anonymous said...

So what do i do. What do i need to do presently?

4/13/2012 05:46:00 PM  

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