Gallery owners feeling pinch of recession
Few owners have closed during the recession, but some are relocating, offering deals and re-evaluating their business
Chicago Art Department

Jen Rosenthal, director of development of the Chicago Art Department, looks out onto South Halsted, where many galleries have closed. (Tribune photo by Alex Garcia / August 18, 2009)



By Mark Caro and Lauren Viera Tribune reporters

August 23, 2009


After almost 20 years in business, Martha Schneider of the Schneider Gallery thought: Game over.

"If you had asked me a month and a half ago, I would have said, 'Dead,' " Schneider said of her River North contemporary photography gallery. "In April, I thought we had enough money until August or September. But we had two or three sales that were nice, and I said to [my assistant director], 'Now we can plan another show.' "

Schneider's experience is far from unusual among Chicago's galleries weathering the prolonged dip of the art market. Gallery owners typically say business got bad last summer or fall and stayed that way, though they've seen enough recent flickers of activity to hope this fall season will mark the long-awaited rebound.

Compared with New York, where The New York Times reported in June that more than 20 galleries had closed, Chicago's leading art districts have remained relatively stable. River North, the most established gallery area, has seen some businesses move or otherwise constrict their operations, but the bulk are still standing. The West Loop has suffered a few closings, while empty storefronts dot Pilsen's developer-designed art district.

The local galleries' struggles come as little surprise amid an economic crash that has claimed countless casualties. Art, despite its life-and-death status among those who create and embrace it, falls into the discretionary-spending category for many.

For Carrie Secrist, who relocated her 17-year-old eponymous gallery from River North to the West Loop in 2003, business was humming until a few months into 2008, when buyers began delaying decisions to buy art -- a dynamic noticed by several gallery owners. By the beginning of this year, Secrist said, "it seemed like everyone was just frightened to spend money. It seemed entirely psychological. [Colleagues and I] were looking at each other, thinking, 'Will anyone ever buy art again?' "

The free fall of what had been a thriving -- and some say overvalued -- art market has changed the way many galleries do business. David Leonardis took drastic actions. He closed his River North outpost in May, stressing that he received double his money back on the property after less than three years but acknowledging that his business there wasn't working.

"If there were more people walking in there buying my art, I may not have sold it," he said. "I can sell more art in Wicker Park in my sandals than with a bunch of people blowing smoke ... in River North. I sell the happy fun art to the cool people, and that's what's happening in Wicker Park. River North doesn't have the cool people."

With his namesake Wicker Park gallery, which he opened in 1992, Leonardis offered a buy-one-get-one-free sale early in the summer followed by a 70-percent-off sale for works from his private collection. These aggressively publicized promotions, Leonardis said, "totally gave us a big shot in the arm," and he's now planning a "cash for clunkers" art sale/exchange. Other galleries have been offering special discounts as well, though don't count River North's Catherine Edelman Gallery among them.

"This is a great divide among dealers," said Catherine Edelman, who opened her photography gallery almost 22 years ago and also is president of the Art Dealers Association of Chicago. "I don't believe that you cater to the financial climate at hand. I believe in my artists, and if they're priced at $10,000, then that's what they deserve to be priced at."

Lowering the prices in response to the economy, she added, "would kill the market that we've spent so many years creating, and it would be unfair to the artist."

Nonetheless, several galleries have been pushing more moderately priced, accessible pieces to lure buyers. "One thing that has changed and will stay changed for a while is the collectors' appetite for truly challenging works in terms of price and scale," said Ken Saunders of the Marx-Saunders Gallery, which will become the Ken Saunders Gallery when co-owner Bonita Marx retires Aug. 31.

William Lieberman said his Zolla/Lieberman Gallery in River North has enjoyed a surprisingly strong summer thanks to a show emphasizing recycled materials called "Second Stories: Artists Making Do & Fixing Up." The prices ranged from $200 to $2,500, but he said most sales were for $900 or less.

"It gave younger artists an opportunity, and it gave us an opportunity to show something different," Lieberman said.

Lieberman stressed that he hadn't quit moving big-ticket items as well -- he said he just sold a $125,000 Deborah Butterfield sculpture -- but the push for newer artists is being echoed across the city and country.

"People have rethought some of their programs and have presented work that's more affordable, and that does tend to be younger emerging artists," said Linda Blumberg, executive director of the New York-based Art Dealers Association of America.

The up-and-comers' gain may be the more established artists' loss. "I think the ones who are really suffering are the veterans," Schneider said, "because they've gone from selling five or six pieces a month to one every other month."

Edelman said she has dropped several name artists from her roster because their numbers fell off the cliff. "In the last year there are about four or five artists who I haven't done anything for," she said. "It's not their fault. I just haven't been able to sell the work."

Part of what's happening is that galleries present mostly works by living contemporary artists, a market that is decidedly down. But the relatively limited-quantity pieces by modern-art masters haven't followed the same pattern.

Richard Gray, whose 46-year-old self-named gallery has locations in the John Hancock Center and Manhattan, said the first half of 2009 was "as strong a first six months of the year as we've ever had." His contemporary-art sales were down, as was the overall number of transactions, but the gallery more than compensated through the sale of some classic modern works, including more than one Picasso this year.

"The market's never been stronger for the really rare, really fine, highly exceptional works of art," Gray said, noting that the economy has given more owners of such pieces incentive to sell. "I think we're probably enjoying the fallout from the fact that certain people who have great, rare works of art are more wary than ever of having it known that they're in the marketplace and selling things. So they're not so inclined to put it in a public auction where they get a lot of attention, so we as private dealers are getting more of that kind of trade."

But for most galleries, selling the occasional Picasso is not an option. Susan Aurinko, owner of the West Loop's Flatfile Galleries, saw her costs exceeding profits late last year and began weighing her options. By January she was just hoping to keep her 9-year-old gallery open through the summer to showcase the artists she'd lined up. Her business-savvy husband offered a reality check.

"He said, 'It's a lot going out and not coming in, and it's just not practical,' " Aurinko recalled. "It was a for-profit gallery that operated like a non-profit." She closed shop in March.

Over in East Pilsen on West 18th Street, photographer Michael Parker operates -- and lives in -- his own airy, split-level storefront gallery and showroom at the heart of the neighborhood's Chicago Arts District. The Podmajersky Inc. real estate company has been developing this arts community for about six years, but, Parker said, "it's a ghost town."

At the district's Second Fridays open house event last weekend, the Chicago Art Department, a not-for-profit space for new and emerging artists, was buzzing with activity, while four neighboring storefronts were empty save for matching blue-and-orange Podmajersky "For Lease" signs.

"It's a shame," said Parker, who leases from Podmajersky and, like others interviewed in the neighborhood, wondered whether the company will continue supporting the Arts District. (No one at Podmajersky returned phone calls.) Parker's own commitment is wavering as well; he said he hasn't sold a single work this year, and if he can't find new income by October, he may store his art and travel overseas.

"I love Chicago," he said, "but the numbers are starting to pinch."

Also in need of money is the I space Gallery, a not-for-profit satellite of the University of Illinois' College of Fine and Applied Arts operating in a prime River North spot. Its private foundation support dried up, the university pulled its funding and its lease expires Dec. 30, said gallery director Mary Antonakos.

"I'm very worried about I space closing," she said. "Any time you close a facility and have to find another space, you're at risk."

Edelman said her business is down about 25 percent to 30 percent this year, and that follows a 2008 that ended with a "terrible" six months. Stephen Daiter of his eponymous River North gallery said his business is off about that much as well, and Blumberg said anecdotal evidence indicates that a 25 percent drop-off is "generally the consensus," though some galleries are down much more, and what really matters are whether a gallery was earning enough -- and economizing enough -- to stay in the black.

Schneider said she has whacked various expenses, including reducing the frequency of new shows, forgoing her own salary and requiring artists to frame and hang their own works. "On the reception evening for the artist we used to take them out for dinner," Schneider said. "Now we have a beer at my house."

Daiter also cut his number of shows, launching one instead of two every two months, and he's taking his works to fewer international art fairs after a woeful Art Chicago. Edelman, in contrast, is increasing her art fair travel. "While a couple of years ago I wouldn't have felt the need to do so many art fairs because we were making enough money in Chicago, there's a need now to do more," she said.

As Woody Allen might say: Whatever works.

Aurinko reports that she's earning more now as a photographer and independent curator than she was running Flatfile. "I have other things, but some of these people don't have other things," she said. "Some of those people are going to wind up working at an insurance agency or something."

But most longtime gallery owners remain focused on gutting out this recession as they did the downturns of the late '80s and early '90s.

"Being in the gallery business is a long-haul endeavor," Leonardis said. "The rewards are great, so you have to have that mentality that you'll overcome the obstacles."