American and European 19th and 20th Century Works of Art
with a special focus on the art of california
Sunday, November 16, 2008 - San Francisco Chronicle Article by Julian Guthrie
Even art takes a hit in economic downturn, Sunday, November 16, 2008
Tens of millions of dollars of art went unsold at major auctions in Hong Kong and London in September and October. Then with the Nov. 3 start of the important fall season in New York, sales of Impressionist and Modern paintings at Sotheby's came in more than $100 million below the auction house's low estimate.
And last week, as Christie's in New York prepared for its contemporary art sales, consigners were urged to lower expectations and collectors were quietly advised to ignore estimates and "basically bid anything."
San Francisco art dealers are tracking results closely, looking for signs of life in a battered industry where calls have dwindled, foot traffic has slowed and sales are anemic. Gallery owners are cutting costs, losing sleep and bracing for tougher times ahead. And, they're worrying about their artists, who get paid only when a sale is made.
"Everybody is concerned about what is happening," said Rena Bransten, who opened her gallery in San Francisco 30 years ago. "I've gone through this before, but this is so different because it's global. And, part of being a dealer is not only selling art but supporting your artists."
While parts of the art market remain healthy, the global financial turmoil that has decimated portfolios and pummeled emerging markets is having another impact that some see as positive: The gravity-defying prices of recent years are being adjusted.
"We're seeing a correction whose time has come," said Gretchen Berggruen, co-owner of the John Berggruen Gallery in San Francisco, which opened in 1970 and specializes in 20th and 21st century American and European art. "What is still selling is work that doesn't have an overblown sense of fashion, and by that I mean that the artist is young, 'everyone' has to have his work, and you're lucky if you can get it for $150,000. It's now more about finding very good quality work at a fair price. People have had to become more realistic."
Parts of market are strong
The worldwide art market, comprised of more than 150 submarkets - including everything from painting to furniture - is expected to have sales this year of $38 billion, excluding revenue from China, India and the Persian Gulf states, according to David Kusin, a Dallas analyst who specializes in the economics of the global art market.
Kusin, a former curator at the Metropolitan Museum of Modern Art who founded his business 10 years ago, advises institutional clients on such things as which kind of painting makes the best investment and whether it's better to sell in Paris and buy in Cologne, Germany, or whether the time is right to sell 18th century English case furniture.
"Parts of the market remain strong," he said last week, and other parts are "positively toxic."
The strong areas in the market include 17th century Dutch landscape paintings, 15th century Northern European sculpture and 19th century ceramics, he said. The weakest part, Kusin said, is contemporary art, particularly works by unseasoned artists.
Kusin considers many contemporary artists - notably Damien Hirst, best known for his animals in formaldehyde - a "flash in the pan who will not be remembered in 100 years."
"Damien is a good businessman, but in 100 years, people won't know who he is," Kusin said. "Contemporary art sales, on a relative basis, will be very disappointing. The primary buyers of hot contemporary art are those whose incomes are most at risk today. The people who are still buying are the older collectors with more stable money."
Martin Muller, owner of Modernism Inc. in San Francisco, attended the Nov. 3 evening sales of Impressionist and Modern art at Sotheby's. He watched as a 1916 Suprematist work by Kazimir Malevich was bought for $60 million. The sale - a record for the artist - was negotiated before the auction began. He also saw a 1918 painting by Modigliani, expected to fetch up to $25 million, fail to generate a bid.
"People were ready for the worst, but the worst didn't happen," said Muller, who opened his gallery in 1979 and specializes in modern and contemporary works and the Russian avant-garde. "The works that sold either went at or below the low estimate."
Peter Fairbanks, owner of San Francisco's Montgomery Gallery, worked for Sotheby's in London in the 1970s and Phillips in New York during the 1980s, losing his job in both cases because of the economic upheaval of the time.
"I've been through recessions, just not as severe as this," he said. "During these down times, I turn to other work. I do appraisals. I authenticate paintings."
Trying to be optimistic, he said, "There are bubbles in all kinds of business. The art business is not immune. But it will recover. Sometimes you learn through suffering."
George Krevsky, whose eponymous gallery off of Union Square in San Francisco offers 20th century American art, said, "Business has not exactly been a bed of roses. To be candid, it's been dead. We've taken a hard look at expenses. We've had to cut back hours of some very positive employees. We've had to cut back on advertising. I've been in business since 1978. I know that this too shall pass - although not soon enough."
Boosting gallery traffic
In late October, Krevsky and other members of the San Francisco Art Dealers Association met with the San Francisco Arts Commission to look at ways to bring more traffic to the galleries.
"We are banding together as an association and pooling our resources," said Trish Bransten, a co-director of her mother Rena Bransten's gallery, and head of the association, which has 49 galleries as members. "We're working to improve access to our galleries, and to take advantage of the idea that San Francisco is a destination art city."
Catharine Clark, who opened her gallery in 1991 and recently moved to a space adjacent to the San Francisco Museum of Modern Art, said that her level of concern over the state of the art market ranges from, "I can't sleep at night, to this is just part of the cycle." She said she has cut costs where she can - printing fewer invitations and sending more by e-mail, as an example - and is forging ahead with a full schedule of shows for next year.
"We saw a major downturn with the dot-com bust," Clark said. "I've talked with collectors who said they regret that they hadn't bought more art then. They felt their stock certificates weren't something they could hang on a wall. Art had sustaining value. It always gave back to them."
One of Clark's artists is 65-year-old sculptor Al Farrow, who lives in San Rafael and struggled for decades to make a living as an artist. His sculptures now sell for as much as $150,000, and a show of his works opened last week at the De Young Museum in Golden Gate Park.
"To survive as an artist, I developed a business inside my studio," Farrow said. "I restore any broken three-dimensional objects. I work a lot on tribal and contemporary art. When my own art is selling, I do less of that. When it isn't, I can turn back to that."
Farrow was a structural engineer at Bechtel before jumping into the unknown and becoming an artist.
"I struggled enormously for a long time," Farrow said. "But I had been bored in my job. I was unfulfilled. Art was my love, and became my profession. When I was eating rice and sardines, I reminded myself this is the choice I'm making. I'm an artist. I'm living my passion."
Track the crisis online
Read stories about how your fellow Bay Area residents and businesses are coping with the financial crisis at www.sfgate.com/bayeconomy
Advice for artists
San Rafael sculptor Al Farrow struggled for decades as an artist. His show, "In the name of God: War, Religion and Reliquaries of Al Farrow," opened last week at the M.H. de Young Museum in Golden Gate Park. His works, many priced as high as $150,000, nearly sold out at a gallery show last year. His advice to young artists:
-- Have a business to fall back on. Many artists are painters or plumbers or carpenters on the side.
-- Learn to barter by trading your art for services you need. "I figured out a system way back when, when I had no money and I was married and had kids. My wife needed chiropractic work. I went in with slides and offered art in exchange. I said, 'I don't have money but my wife needs help and I have art.' He went for it."
-- You can barter with doctors, dentists, restaurants, lawyers. "I bartered with a restaurant in the city. When I didn't have money for groceries, I would tell the kids, 'Let's get all dressed up and head to San Francisco.' We would eat beautifully that night."
-- You can't barter indefinitely, but realize that as an artist, you are minting your own money.
(E-mail Julian Guthrie at email@example.com.
This article appeared on page C - 1 of the San Francisco Chronicle on Sunday, November 16, 2008)
Link to the San Francisco Chronicle Article