The art of a recession: Gallery owners struggle

Leslie Levy (left), who has owned an art gallery i (photo credit: AP)
Leslie Levy (left), who has owned an art gallery i
(photo credit: AP)

Art gallery owners across the country are finding they have a tough sell these days.

With houses going up for auction, unemploymentcontinuing to rise and the threat of layoffs seemingly ever-present,many gallery owners in art communities such as Scottsdale, Arizona;Santa Fe, New Mexico; Portland, Oregon; and New York City are closingshop, going broke to stay open or drastically changing the way they dobusiness.

"Art is a very discretionary sort of object, and we are in theworst recession arguably in the postwar era," said Jay Bryson, a globaleconomist with Wells Fargo Securities in Charlotte, North Carolina."Obviously somebody who has lost their job in a factory in Indianaprobably is not buying art."

Even people with plenty of discretionary money aren't spending much on it.

"You'rea billionaire and you took a 40 percent hit on your portfolio, now youonly have $600 million left," Bryson said. "That's still pretty deeppockets, but 40 percent is 40 percent."

In the gallery district of downtown Scottsdale, at least a halfdozen galleries have been forced to close in the past year or are inthe midst of closing. Others still are wondering how much longer theycan hold out.

One recent day, Leslie Levy sat quietly amid thecontemporary art she sells in her gallery, which was just as desertedas the streets outside, where the temperature was in the triple digits.

The summers here are always slow because of the heat, but thisone is much worse than usual. That's partly why Levy is closing herdoors at the end of August after 32 years in business and becoming aprivate art dealer online.

"I'll tell you what - if I was younger, I'd just keep at itknowing we've not seen times quite as bad as this before," Levy said.

Longtime customer Marylyn Gregory of Bernardsville, New Jersey,came in the gallery that day to see it one final time and check outwhat pieces Levy had left of her and her husband's favorite artist.Gregory told Levy she was surprised and upset when she heard thegallery was closing but added, "You're probably doing the right thing."

Gregory didn't end up buying anything that day, saying sheneeded to check with her husband. Before, she might have been morespontaneous.

"Sometimes you'd go to an opening and have a glass of wine, andyou're like, OK," she said. "It's certainly the method to get everyoneto open their checkbooks."

But like many other art lovers, the Gregorys are more conservative with their money these days.

Levy understands. "People are watching what they spend - cuttingback and spending on the necessities of life. That makes sense topeople."

Becky Smith knows that all too well. She owned the BellwetherGallery in Manhattan's Chelsea neighborhood for a decade, but closed atthe end of June after watching her revenue plummet to $80,000 gross inthe first quarter of 2009. She had $40,000 net, and $10,000 of it wentto rent each month.

The $80,000 figure was down from about $350,000 the same quarter in 2008 and about $600,000 during that period the year before.

"I was really startled," Smith said. "It was the spring of '08where I saw three shows that should have been blockbustersunderperform, and I was in shock."

"Things were booming so intensely a couple years ago and thependulum has swung so far in the opposite direction, it was impossibleto know where I stood," she said. "And I didn't want to be paying for astorefront while I was figuring it out."

In the past two years, at least 24 galleries have closed in Manhattan, mostly in Chelsea, according to New York City-based Artnet magazine, which covers the fine-art world. "That's really dramatic," said Artnet editor Walter Robinson.

In Santa Fe, New Mexico, between 10 and 15 galleries have closedthis year, said Christy Walker, managing director of the Santa FeGallery Association.

"A lot of people have this idea that running a gallery, theowners make a lot of money, when it's just a lot of effort to make aliving off of it," she said. "It's a hard business to be in, and whenthings are good, things are good, and when times are tough, it's areally tough business to maintain."

Kraig Foote of art one gallery in Scottsdale has done everything he can think of to avoid shutting down.

His house is about to go up for auction because he hasn't made apayment in seven months, he has laid off his two employees and he hasresorted to selling his own beloved art collection for a fraction ofwhat it's worth.

"I have given up everything," he said recently in the veryempty gallery, which sells work by local high school- and college-ageartists.

And still, the threat of closure looms.

"I'm trying to make it to December," Foote said. "I think peoplewill start spending again once they get to the next holiday. They'llsay, 'We've saved, let's get something.'"

He paused. "I don't know."