Your First Recession as a Dealer? Must-Read Advice in The Art Newspaper

On Page 30 of the Art Newspaper's summer edition (they were kind enough to offer me a quick, free subscription to their new digital edition, which is lovely, but now that I have been flipping through it on my laptop [love the sound the pages make when you turn them!], I'm already looking forward to the time I can get the iPhone version...hint, hint) is an article every young art dealer currently struggling must read. I don't mean should read either...if you want to stay in business, rush to that article, which summarizes a panel discussion by seasoned art dealers in London discussing how to get through a recession. It's full of the very best, most honest advice I've read on the subject anywhere.

Some of the advice offered contradicts other advice. One panelist suggested now was a good time to standardize relationships with artists by binding them to contracts. Another countered that it's better to offer artists contracts when times are good and you have more to offer them. But among the gems in the report were the following:

"If you sit in the gallery feeling sorry for yourself, you've had it," said [London dealer Alan] Cristea. "The most important thing is to see the new reality as a creative challenge. The moment you view it that way you'll almost certainly get through it. You can get far more satisfaction out of doing reasonably well now than you could get from doing well two years ago because anyone could have done incredibly well two years ago. It was like falling off a log."

And, in support of what I argued here, as well as some truly priceless advice about the long run, Thomas Gibson noted:

Do not be put off at starting up in a recession, as you will learn much more prudence this way--I started in 1969/70. When the next recession comes, and it will, make sure you are in a position not to have to sell while being in a position to buy. After World War II, the Rosenberg gallery in New York held an extraordinary exhibition of Cubists: Picassos and Braques. Nothing sold. Mr and Mrs Rosenberg took the works upstairs to their flat. Then, in the 80s they brought them down again and people marveled--"Where did you get these fantastic works?" Every one of them sold. Remember the old maxim--a dealer earns a living by the art he sells, but a fortune by the art he keeps.

Some of the advice offered was heartless, even if worth heeding:

"Cut costs as quickly and radically as you can. Speed is the most important thing. Don't wait, don't let it get out of control. Act immediately." This is the advice of Karsten Schubert, the German-born London dealer.... The process is "very painful" says Schubert because "you are dismantling what you've built over the last few years," but the only way to continue operating is to "let very qualified staff go very quickly and very brutally" and, where possible, to reduce overheads such as rent.

No matter how challenging it gets, however, young dealers must resist the urge to panic. Having woken at 4 in the morning, having run the numbers in my semi-conscious slumber, simply horrified at the "new normal," I know all too well how panic can seize you, but as London arts lawyer Nicholas Sharp noted:

The panic must be overcome quickly...and the debt must be tackled head on. Although clients are asking for advice on "how to deal" with it, Sharp concded that "lawyers can't be much use because, in most cases, the debt is not disputed. It's simply money owed which can't be paid." The best thing is "to try to deal with problems before they arise. Go to your creditors and talk to them--set up deals where you can pay them in installments," said Sharp.

Like I said, this is the most honest, most helpful advice on the topic I've read anywhere and it's a real credit to the London dealers and arts professionals willing to share their wisdom with younger gallerists.