The Collector’s Issue | State of the Art Market

By Norman Kolpas

Pick up any newspaper, watch the evening news, or surf the web these days and you’ll likely hear the latest predictions about the state of the nation’s financial health. In these uncertain times, countless experts are ready to speculate that the economy has bottomed out or turned a corner, is on the rise or headed for a new plunge.

Such punditry can leave an art lover’s head spinning. Who and what should you believe? Is the time right to buy all the art you love and hope for brighter days ahead? Or should you sell everything, convert the cash to gold bullion, and stash it in a safe-deposit box?

While we at Southwest Art don’t presume to offer financial advice, what we can do is tap into our own network of experts—the art show and auction directors, gallery owners, and artists who grapple daily with the effects of the economy on the art market. Their observations and advice can help anyone interested or involved in art make their own informed decisions during the months to come.

Major Auctions: “A Buyers’ Market”
“The trials and challenges that everyone is experiencing right now come to life in an event such as ours,” observes Duane Braaten, art director of the C.M. Russell Art Auction, held each spring for the past 41 years to benefit the C.M. Russell Museum in Great Falls, MT. Indeed, the immediacy of an auction can reflect the economic environment just as readily as a blood pressure monitor displays a patient’s vital signs.

Preceding the current downturn, the patient seemed robustly healthy at the 2008 auction, “a record-breaking year” for sales according to auction director Ellen Gauthier. This year’s event showed noticeably lower sales, closer to those of 2007. Yet, says Gauthier, “it was still the fifth highest year of sales in our history.”

Strong sales in 2009, however, may be due to the fact that “this year it has clearly been a buyers’ market,” says Peter Stremmel, auctioneer and partner in the Coeur d’Alene Art Auction, the nation’s largest western auction, held each July in Reno, NV. Of the 284 items on the block at this year’s event, some 90 percent sold—a remarkably high figure that Stremmel credits “to the fact that there are still buyers around.” But he hastens to point out that many were willing to go only as high as the lower end of a work’s pre-auction estimate. “And as much as 20 or 25 percent sold below the low estimate.”

From the perspective of both these major auctions, one constant remains clear: It’s all about quality. “The best work is floating to the top and still selling,” says Braaten. Adds Stremmel, “A great painting fresh to the market in good condition will always find a buyer.”

The Big Shows: “Selective Collectors”

The folks who head some of the nation’s leading western art shows seem to concur with their auction world colleagues. “Did our latest show reach our wildest dreams? No,” says Chuck Schroeder, president of the National Cowboy & Western Heritage Museum, of the 36th annual Prix de West Invitational Art Exhibition and Sale, which took place in Oklahoma City in June and offered up 343 paintings and sculptures. Nonetheless, it brought in more than $3 million during opening weekend, making this the second best year in the show’s history; over 60 percent of the total inventory had sold by August.

Schroeder says he saw the biggest sales resistance to larger, higher-end, big-ticket pieces. But, he continues, “Many of our artists scaled back the size of their works and priced them with some sensitivity to the economy, so everyone benefited.”

“Collectors have become selective,” concurs John Geraghty, a special advisor to the Autry National Center’s Masters of the American West Fine Art Exhibition and Sale, held last February in Los Angeles. “They have done their homework and are no longer swept up” in what might be considered the buying frenzy of the recent past.

The Galleries: “Building for the Future”
“Art buyers are certainly watching their money more. It seems they’re not spending as much as they did last year and that they’re more apt to buy a smaller, less expensive painting,” says Jim Janes, co-owner of San Antonio’s Greenhouse Gallery of Fine Art, which cele-brates its 28th anniversary in January.

The factors to which Janes credits Greenhouse’s longevity have, in fact, served the gallery particularly well during these challenging times. “Our location doesn’t get the walk-in traffic of a gallery in Santa Fe or Carmel, so we’ve always had to figure out ways to reach our clients. We send out a lot of information and sell a lot by mail or Internet.” Since the recession hit, he says, “We’ve been communicating even more.”

Greenhouse Gallery also stays in close communication with its artists. “I tell them the best thing to do right now is produce the very best work they possibly can,” says Janes. “It’s all about quality. The better the art is, regardless of the price, the more likely it is to sell.”

Even a high-traffic area like Santa Fe’s popular Canyon Road faces similar challenges. “The dollars have definitely declined,” says Bonnie French, director of Waxlander Gallery. “But Santa Fe hasn’t lost its vibrancy, and I feel lucky I’m in one of the top art markets of the country.” To capitalize on that energy, the Waxlander team decided to increase the number of shows this year from eight to ten, giving clients more reasons to return for another look.

French, too, sees communication as key to weathering the recession. “At the beginning of the year, when we sat down to look at our budget, one of the places we felt we couldn’t back off was marketing. We’ve actually done more advertising.” In fact, she says, many sales have come from clients who see art in print, call up, and buy on approval. Similarly, the Internet has become a crucial component to their sales strategy. “If a person falls in love with piece in a magazine and it’s already sold when they call, we ask, ‘Are you close to a computer?’ Then, one of our art consultants will show them other works we have available online.”

For some gallery owners, the Internet is a true saving grace. When Joyce Robins closed the doors of Joyce Robins Gallery in Santa Fe this past May—after being open for “13 years and six weeks”—she could look forward to an online life for the business she loves. “Closing was such a hard decision, but it costs so much money to run a brick-and-mortar gallery,” says Robins, who now runs a virtual gallery. “I would not be able to continue selling art without the Internet.”

Yet even in the current harsh business climate, some art entrepreneurs see fresh opportunity. Take InSight Gallery, a new 4,000-square-foot venture in the popular Texas Hill Country town of Fredericksburg. “It’s tough in this market,” concedes David Plesko, who opened the gallery in April with his wife, Meredith Gillespie Plesko, and sister-in-law, Shannon Gillespie Hanna. “But the Texas economy hasn’t suffered like much of the rest of the nation, and the art market is on its way up in this town, where a million tourists came through last year. We view Fredericksburg as the next Jackson or Santa Fe. For us, it’s all about building for the future.”

The Artists: “A Shot of Adrenaline”
The art market wouldn’t exist, of course, without its sole commodity, art, and the people who make it. So the artists’ perspective provides particularly incisive lessons on the recession’s effects.

Tim Cherry, who creates sleekly abstracted sculptures of animals in his studio in Branson, MO, finds hope in the forward-looking business plan of the latest gallery to represent him, none other than InSight in Fredericksburg. “They’re very energetic and positive, and looking at the market with fresh eyes,” he says.

Nevertheless, he has seen an across-the-board downturn in sales, about a third from the year before. Cherry, however, chooses to view that decline as a challenge. “It’s a shot of adrenaline to make me think outside the box as much as possible. I’m working my tail off, exploring different media and experimenting more.”

Painter Douglas Morgan of Sebastopol, CA, has seen a similar decline—and similar opportunity. “I’m probably down about 35 percent from this time last year,” he says. Despite that, his paintings sold “fantastically” at the sixth annual Telluride Plein Air show in early July, where he sold 16 paintings and won the Southwest Art Award for overall excellence. Morgan also credits the high sales volume to the fact that the Sheridan Arts Foundation, which hosts the event, asked artists to lower their prices, and he cut his by 20 percent. “People are looking for a deal,” he says.

Overall, Morgan says, he sees “smaller paintings and lower prices” as one key strategy right now. “If you entice people to buy your work,” he continues, “maybe they’ll start a collection. And as the economy improves, they’ll spring for more expensive paintings. After all, folks still want things on their walls. And there’s nothing so nice as a piece of original art.”

Featured in October 2009