A Market Takes Off

In New York, one can observe the global art market breaking into two: as the four mega-galleries pull out ahead, the foundation is falling by the wayside

Preview Berlin 2013 Catalogue, 18. September 2013

Nicole Klagsbrun points out the chest-high line leading around the walls of her gallery. Water from the Hudson River deposited by Hurricane Sandy last October went up to here. “We lost everything up to that line.” As always, when disaster strikes, New York discovers an amazing sense of community during the clean-up. “It was an incredible energy,” Klagsbrun says in her office over a can of beer on a Saturday evening in May, while noise from a performance penetrates through the walls from the adjacent room. “Everyone rolled up their sleeves, working in the dark, without electricity.” Almost all the galleries survived the damage, thanks in part to the support of the Art Dealers Association of America. Even Nicole Klagsbrun. But now, with everything back in place, Klagsbrun has had to close her gallery. “I’m not ill, and I’m not broke,” she explained in late March to the Art Newspaper. “I just don’t want to have anything more to do with the gallery system.”

For over thirty years, Klagsbrun was part of the New York art scene. In 1989, she opened her gallery in SoHo. With the rise in property prices, she moved to Chelsea. He space was located on 24th Street, diagonally across from market leader Larry Gagosian. Klagsbrun never ranked among the top sellers, but some of her artists have now ended up at the top galleries. Klagsbrun’s gallery was just one of about 600 in New York. But her closing was met with concern, because her departure left anxieties in its wake that plague many – and not only in New York. “Artists, museum professionals, art dealers: everyone seems to sense that the art world has problems,” says the ex-gallerist, who now intends to work on a project basis.
Is the gallery district in Chelsea coming to an end? In its heyday, there were 350 galleries here. 204 are currently left, according to the website “GalleristNY”. And this is not due to Hurricane Sandy, but more to rising rents. The structural changes that have affected the global art market can be seen clearer here than elsewhere. Though these changes have also affected Berlin, where Giti Nourbakhsch and Martin Klosterfelde, longstanding and reputable dealers, recently turned their backs on the business. To understand the market climate, it’s worth taking a look at the centre of the storm: New York.

Almost simultaneously with Klagsbrun’s announcement, a much-discussed essay by art critic Jerry Saltz appeared in New York Magazine: “The Death of the Gallery Show”. “Chelsea galleries used to hum with activity;” Saltz wrote, “now they’re often eerily empty.” The fact that crucial sales are now taking place at art fairs and in auctions – and, increasingly online – is well-known. What Saltz added to the analysis, is on the one hand, a threat to mid-sized galleries in the art market due to the dominance of the top galleries, and, on the other hand, a change in how art itself is treated: “Fewer ideas are being exchanged, fewer aesthetic arguments initiated.” Exhibitions no longer have impact; art loses any friction.

To understand what kind of person Saltz is, you can talk to people who were cleaning up after the madness of Sandy. Out on a lonely stroll, the critic suddenly walked into chaos and profusely thanked helpers who were total strangers: “You guys are great. Without you, none of us would survive here. Thank you!”

Someone who understands art as such a collective event becomes melancholy when he senses that a global market has taken the place of intellectual exchange. When only those can keep up who can also afford tickets to Art Basel, Art Basel Miami and Art Basel Hong Kong. When not only the critics’ relevance has become more limited, but also the personal choices of gallery owners. “There used to be a much closer relationship between the artist, gallerist and buyer,” says Klagsbrun. Due to the pressure to be present at major art fairs, the work is becoming more strictly formatted. “Either you conform or you’re out,” Klagsbrun sums up. “And I'm out.” For similar reasons, the Margo Leavin Gallery in Los Angeles closed last summer. “It's not the way we like to do business. To produce works for an art fair is just not what our artists do,” Leavin told the L.A. Times.

One can regularly witness a similar scenario at art fairs that took place at the Frieze New York in May: large galleries scoop the market, while the smaller ones are left out in the cold. The new money pouring into the art market flows mainly into established positions that represent a safe investment. Will this be the end of the middle field in the art market? Are we standing at the threshold of a major decline in galleries?

“Nonsense,” says David Zwirner. “I think this is a golden age for galleries.” His space on 18th Street in May offers a completely different picture. One of the most expensive gallery shows of all time has just opened: “Gazing Ball” by Jeff Koons. One could say that the gallery is humming with activity – even Jerry Saltz is there. Koons’ new phase of work is proving to be popular. Zwirner welcomes many Koons collectors who once bought from Ileana Sonnabend. After her break with Koons, he couldn’t get a solo exhibition for a long time in New York. Some of the new works, at price tags of up to three million dollars, sold directly, and even on the weekend after the opening, Zwirner has a difficult time tearing himself away from the sales talks. It’s undeniable: business is booming in Chelsea. “The art metropolis has never done better. There have never been more galleries,” says Zwirner, who after the opening of his London branch is named in the same breath with the global leaders: Gagosian, Hauser & Wirth, Pace.

Klagsbrun and Zwirner: two contrasting fates, two contradictory representations of the art world. How does that work?

Much has been written recently about David Zwirner – perhaps too much. On the one hand, this is due to the fact that the son of the legendary Cologne art dealer Rudolf Zwirner is German. For American journalists, his brittle correctness is interesting; for Germans, it’s his success. But even more decisive is that his remarkable ascent reflects recent developments in the art market.

The first is the increased importance of the secondary market, on which Zwirner’s success builds. Recently, he opened a second address on 19th Street, where in May he exhibited drawings by Blinky Palermo and the early sculptures of Richard Serra. Serra himself helped organise the loans from private and museum collections. Increasingly, dealers are taking on historical exhibitions that many museums can no longer afford. In this way, Zwirner has won the credibility and the confidence of artists and executors.

On the other hand, there is the concentration of capital, which has increased rapidly since the financial crisis of 2008. It reflects the drifting distribution of wealth worldwide. And it has allowed a small group of the world’s most expensive artists to realise ever larger works.

For instance, former underdog Paul McCarthy inflated a giant dog balloon in front of the Frieze New York tent, which made Koon’s steel sculptures look like rubber toys. Subversive mockery? It was more a case of: I can do it even bigger. For weeks, his gallery Hauser & Wirth exclusively showed McCarthy works in its two New York branches – including massive sculptures that looked as though figures from Disney’s “Snow White and the Seven Dwarves” had been swirled into the air as if by magic and then allowed to solidify into black walnut. Jeff Koons, who next year will get his first New York retrospective at the Whitney Museum, is currently promoting his plan to have the replica of a steam locomotive built in 1943 dangling headfirst from a crane over the tracks of the Highline. In other words, a segment of the market is actually taking off with full force.

“The four mega-galleries have broken away like a subcontinent,” Jerry Saltz sums the situation up in an interview on the fringes of the Frieze. Those artists who go to Gagosian lift themselves above any examination. “You become a bull; a huge money-producing animal that people come to look at in a pasture.” Many of the great artists have started thinking to themselves: “Holy shit. What have I done?”

There is no longer just one art market. There are now two: the top and the rest. They may use the same vocabulary and show up at the same art fairs, and their audiences may overlap. But this shouldn’t obscure the fact that two vastly different types of economic activity are at work here, which also serve different types of clients: on the one hand, the declining share of middle-class collectors who discuss artistic works with gallery owners at art fairs, and on the other hand, collectors, who, often represented by art consultants, know in advance what they want – and can also pay for it. In the one market, young artists receive opportunities to develop their work, which, if successful, they can then convert into cash in the other. This market of mega-galleries may actually have more in common with the yacht and luxury watch market than with the traditional art trade. Saltz calls the mega-galleries elephant cemeteries, where artists go to die. “These galleries aren’t even doing art anymore,” he says.

Both markets may overlap: what’s fatal is that the connections are disappearing. Artists can rise, gallery directors as well; but the market itself is curdling. In this way, relations between artists and gallerists are continually at stake, and with them, the confidence and security that allow innovations to take place.

“It’s never been easier to open a gallery,” says David Zwirner. “But how can you grow?” asks Nicole Klagsbrun. Zwirner: “Maybe there are too many galleries.” In recent years, several new establishments have started up in the East Village, and satellite fairs like the Basler Liste or the NADA, tethered to the Art Cologne, Art Basel Miami and Frieze New York, offer young dealers a forum in which curators also shop for professional collections. There have been scattered success stories, such as the Brooklyn gallery Real Fine Arts, which has been working for four years with rotating friends of the artists, and on the first day of the Frieze almost sold out the entire stand. “It’s really not that difficult as long as you don’t follow the typical model,” explains artist and co-founder, Ben Morgan-Cleveland.

Even in Berlin, where there was certainly never much to go around, a heterogeneous picture emerges. Some, like Klosterfelde, close their doors, while others expand: Max Hetzler is swapping his factory floor in Wedding for two new rooms in Charlottenburg and plans to open a branch in Paris next spring. By taking over St. Agnes Church, Johann König set a new spatial measure for galleries in Berlin. Like Zwirner, he is consolidating his business by diversifying with young artists, estates and established artists. Recently, Katharina Grosse and Monica Bonvicini placed their trust in him. König’s example shows how the requirements have changed for mid-sized galleries. Those who don’t want to be crushed generally have to take the bull by the horns and focus on growth. However, the gallery Kraupa Tuskany-Zeidler, founded in 2011, has demonstrated with young post-Internet artists that it is still possible to invent new niches.

“The bottom tier has no problem,” says Saltz. The problems are in the midfield: “If the mid-sized galleries in New York and Berlin continue to try to compete with the mega-galleries, they will not survive.” But if they “survive the plundering of the mega-galleries, then they can have fun again. Then they can do whatever they want and take over the discussion.”

An earlier version of this essay appeared in the Welt am Sonntag (“Titanen kämpfen immer allein” [“Titans Always Fight Alone”], 19. 05. 2013)

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