Gallerist, a bad business?

Thanks to a questionnaire sent to 8,000 gallerists (of which 1,300 replied — 93% specializing in contemporary art) the author  — co-founder of Larry’s List  — compared the collected data from Germany, Great Britain and the United States.

The key findings:

·      55% of galleries had a revenue of less than $200,000 per year and 30% lost money
·      The average profit margin was not more than 6.5%
·      The sales revenue is distributed 50/50 between artist/gallerist
·      The more employees were paid, the more profitable the gallery became (obviously wages may be higher in an already successful company)

Graph via Management of Art Galleries

The conclusion of the report can be summarized quite nicely by Wallspace gallery, who announced their closure in Manhattan this week, explaining to Bloomberg: “Our primary focus didn’t always correlate with financial success.”

So do the 1% of the most important galleries monopolize all the benefits? Despite the aforementioned closure, at least in New York, London (and Paris), spaces opening seem more numerous than closures. And this doesn’t solely apply to additional branches of the mega-galleries.

Data like this sometimes needs to be surveyed over several years, the production and exhibition cost of an emerging artist, might be compensated by a “blockbuster” success the following season. Additionally, it is no surprise to discover that a small portion of galleries exist without the intention of even making a profit.

As for Magnus Resch, he estimates that if galleries aren’t making money, it’s partly down to marketing shortfalls, adding that if salaries are often low, it’s because “the best educated people … will almost always choose another industry to work in.” Ouch…