Art Galleries Fight to Survive



It might not look pretty from the outside, but this is New York’s contemporary art center, which is determined to survive turbulent times. Photo: Stephanie Ott.

In Chelsea, 300 contemporary art galleries sit together in a few blocks in the West 20s, creating a vibrant path of storefront windows bursting with color and creativity. Behind the gallery doors, owners are busy on a pressing project: devising strategies to keep their businesses alive as the neighborhood gentrifies around them.

Wary about the future, galleries are working to build a strong customer base — not only New York-based art collectors, their core focus, but an international base via the internet. They set up events and try to build an appealing brand, one that will keep loyal old customers satisfied and also expand to reach new ones.

Though many galleries were forced to close in recent years due to financial strain, Gallery Henoch is one of the survivors.

“Someone warned us that something big was happening, but we thought worst case, we’ll have a bad year,” said Gallery Henoch’s assistant director Andrew Liss. But the recession proved more dire than expected, leading to the closure of several prominent Chelsea galleries in 2009, including Cohan and Leslie, Oliver Kamm 5BE, Mehr and Clementine.

“The art market hit rock bottom in February 2009,” Liss said. Only the gallery’s savings helped to keep the gallery at 555 West 25th Street open.

Gallery owners said that several factors helped ensure their success, including a roster of unique artists, heavy foot traffic, a strong client base and the development of new business models. But the recession showed them how fast things can fall apart, so prudent owners are trying to build a financial cushion against whatever comes next.

“The more we can sell now, the better we can save for the future,” said Liss.

It isn’t easy.  “In 2007 it was much easier to sell art and we would sell twice the volume of what we sell now,” said Liss, who has worked at the gallery for nine years. People felt a sense of stability at that time, but now potential customers are more cautious, hesitant about larger purchases.

The recession was not the first time these galleries faced a fiscal crisis. In the late 1990s, many galleries, including Henoch, moved from SoHo to West Chelsea to escape soaring rents and competition from upscale retailers.

“We were the third or fourth on the block. By 2004 the whole area filled up with galleries,” he said.

Success did not come instantly for galleries in the area between Tenth and Eleventh Avenues and 18th and 28th streets. It took years to build a reputation and to establish a name in the art community. But as galleries amassed in Chelsea, competition grew, which was good for business: the neighborhood became a destination for collectors.

Still, location itself isn’t enough. Galleries are paying more attention to the need to stand out from the crowd. “We’re getting exposure here, but we get less publicity than our neighbors,” Liss said.

To compete, Henoch chooses artists with a niche focus — representational painters, who depict the world as they see it, as opposed to many contemporary artists who work with geometrical or abstract shapes, patterns or splash paintings. The gallery holds regular events to attract new customers and strengthen relationships with loyal clients, like a recent opening reception for artist Robert C. Jackson.

“We have to engage people and make sure that everyone’s talking about our gallery, so that no one forgets about us,” said Liss. “We’re a small business, so we have to know that people stand behind us.”

The gallery represents 24 to 32 artists, with works priced at $5,000 to $150,000. Henoch sells about eight to 10 pieces a month, enough to maintain a business and make profits.  “It’s not cheap here and the rent goes up constantly in Chelsea,” said Liss. Although he declined to name a specific figure, he said rent is around $5,000 to $8,000 a month for their ground floor gallery space.

According to Nancy A. Barton, professor of art and art education at New York University, the most important aspects of staying alive in the art industry are developing a reputation and building a strong loyal customer base. “It’s a complex situation. In some ways, the art market is actually having an upsurge at the moment,” said Barton. “Although a number of smaller galleries closed during the recession, the unstable situation of stocks and the European economy have made visual art an appealing investment for wealthy investors.”

Small galleries are doing well at the moment, but Barton stressed the need to maintain a public profile. “This takes building up a reputation as a serious gallery, one who is worth investing in and who is not going to disappear in a few years,” she said.

And new galleries are springing up in less expensive neighborhoods, just like the Chelsea galleries did decades ago in Soho. Although Chelsea remains New York’s primary contemporary art district, she said, “The Lower East Side and Brooklyn are seeing a new crop of young gallerists, as well.”

Like Gallery Henoch, the Stephen Haller Gallery moved from SoHo and survived the market crash. Cynthia Griffin, co-owner of the gallery, at 542 West 26th Street, said the recession put a strain on her business, but that things are looking up now.

“It’s getting better in comparison to 2009. During the recession people were slower to purchase art, they were much more hesitant,” she said. “New York is still the center of contemporary art in America and Chelsea is at the heart of it.”

Works at her gallery are priced from $10,000 to $250,000. “Our art isn’t ridiculously expensive,” said Griffin. Around a dozen pieces are being sold each month. According to Griffin, summer is traditionally a slow selling season, because many people are away on holiday.

While she depends on loyal customers, like one who has so far purchased 37 pieces, Griffin, like other Chelsea gallery owners, has started to develop a more diverse clientele; in addition to customers from the U.S. and Europe, she now has customers from Beirut.

“What changed is that before our clientele was just based in North America and Europe,” she said. “Now, because of our increasing internet exposure, we get customers from Beirut and Spain,” though the Stephen Haller Gallery has yet to break into the Southeast Asian market.

Tazza Gallery is one of the art district’s newcomers, at 547 West 27th Street opened since May 2012.

“It’s a challenging time to start a gallery in Chelsea,” said Stephen Olsen, co-founder of Tazza Gallery, who hopes to reach a profit within the next two years. At Tazza, the artwork on display is by emerging artists whom Olsen often finds online, like watercolorist Atanas Matsoureff, who paints mainly portraits, landscapes and still lives. Works priced at $1,000 to $5,000 sell best. “People can afford art at that price point.”

Asked how he hopes to survive in the competitive market, he said, “We don’t know yet how to. There’s no magic bullet to establish yourself here.”

Between fluctuations in the art market and rising demand for midtown-Manhattan real estate, questions still remain about the art district’s future. Most galleries that moved into the neighborhood in the late 1990s signed leases running from 10 to 20 years.

“We signed a long-term lease in 1999,” said Liss, although he declined to state when their lease ends. “We will survive.” Even though rents continue to rise, he said that the payoff is the exposure the galleries gain from art buyers who target Chelsea.

The Doosan Gallery, at 533 West 25th Street, is a nonprofit gallery sponsored by the South Korean Doosan conglomerate, which deals with real estate, financial services, IT services, media and retail.

“We want to introduce Korean art to New York, because we see a lot of potential here,” said Kim Chung, a curator at the gallery.

The gallery’s concept is based on a studio residency program: six South Korean artists come to New York for six months and Doosan provides accommodation for them and showcases their art at the gallery. The artworks range from $4,000 to $25,000, with final price open to negotiation. Technically, the artwork is not for sale by the gallery. If a visitor is interested in a particular piece, the gallery puts the potential buyer in touch with the artist to determine the price.

Since the Doosan company funds the gallery, it is immune to the concerns its neighbors must face. The gallery’s sole purpose is to display paintings and promote Korean art; monthly income and expenses are not an issue.

“New York has such a lively and interesting art scene, and we’d like to be part of it,” Chung said.