Chomsky
04-04-09, 05:51 PM
I figured I'd contribute some first-hand observations about the art market, since it's where my experience lies. The art market typically lags other assets classes' performance, and that has held true thus far in this depression.
A year ago in the spring, the market was fairly robust. The gallery I work in New York for was doing rather brisk business. The seasonal auctions at Christies and Sotheby's set records. Summers are always dead, as the well-heeled head off to Martha's Vineyard or the Caribbean, and think little of collecting. Things usually pick up in the fall and enter the high season in the winter. That annual, late-year peak never came, and business has been off by about 50-60% year-over-year. The winter season features a huge number of art fairs, and I believe we participated in six or seven events. Sales from those fairs were nonexistent.
My employer is very conservative financially, and the gallery has no debt. (The same cannot be said for many of our competitors, who frequently use large credit lines to speculate in the auction market.) However, rent on the spacious gallery we inhabit is incredibly steep, on the order of $100K/month, and so our fixed expenses are very high.
Changes are afoot. First, our holiday party was canceled. Then went our lunch per diem (designed originally to keep workers in the gallery so as to be able to respond to clients without delay). Then a couple people were laid off, and another has been moved to part-time work. The gallery is essentially a small business of some 25 people, so any changes to personnel are immediately obvious. This past week we had our medical and dental benefits cut, so that now we must contribute 20% more of the cost from our paychecks. As a result of the above, I've lost about 12% of my total compensation.
Could be a lot worse; I'm just happy to have my job. Stories I've heard from other galleries in our field attest to that. Several have instituted 20% pay cuts across the board, and most have laid off significant portions of their personnel. A few have closed. The two major auction houses (Christies, Sotheby's) have each laid off approximately one-third of their workforces. And in the contemporary art market (I work in 19th-century fine art), which always crashes the hardest, dozens of galleries have already closed. There's even a gallery Death Watch blog for rumors of new closings:
http://howsmydealing.blogspot.com/2008/10/deathwatch.html
A year ago in the spring, the market was fairly robust. The gallery I work in New York for was doing rather brisk business. The seasonal auctions at Christies and Sotheby's set records. Summers are always dead, as the well-heeled head off to Martha's Vineyard or the Caribbean, and think little of collecting. Things usually pick up in the fall and enter the high season in the winter. That annual, late-year peak never came, and business has been off by about 50-60% year-over-year. The winter season features a huge number of art fairs, and I believe we participated in six or seven events. Sales from those fairs were nonexistent.
My employer is very conservative financially, and the gallery has no debt. (The same cannot be said for many of our competitors, who frequently use large credit lines to speculate in the auction market.) However, rent on the spacious gallery we inhabit is incredibly steep, on the order of $100K/month, and so our fixed expenses are very high.
Changes are afoot. First, our holiday party was canceled. Then went our lunch per diem (designed originally to keep workers in the gallery so as to be able to respond to clients without delay). Then a couple people were laid off, and another has been moved to part-time work. The gallery is essentially a small business of some 25 people, so any changes to personnel are immediately obvious. This past week we had our medical and dental benefits cut, so that now we must contribute 20% more of the cost from our paychecks. As a result of the above, I've lost about 12% of my total compensation.
Could be a lot worse; I'm just happy to have my job. Stories I've heard from other galleries in our field attest to that. Several have instituted 20% pay cuts across the board, and most have laid off significant portions of their personnel. A few have closed. The two major auction houses (Christies, Sotheby's) have each laid off approximately one-third of their workforces. And in the contemporary art market (I work in 19th-century fine art), which always crashes the hardest, dozens of galleries have already closed. There's even a gallery Death Watch blog for rumors of new closings:
http://howsmydealing.blogspot.com/2008/10/deathwatch.html