Business is continuing to improve but the rate of recovery has slowed among London’s fine art dealers, their trade association’s latest survey reveals.
Other key findings in the Society of London Art Dealers' (SLAD) poll show the continuing strength of dealer exhibitions, a strong return to gallery-based dealing, a shift in influence between leading fairs and a significant uplift in the number of staff dealers employ.
Set against these positives has been the negative effects of the Artist's Resale Right on business: far more dealers say they are now affected by ARR, with 35% of respondents putting the administrative costs - excluding the levy itself - at more than £30 per transaction.
The survey for 2012, which is carried out every two years and this time secured responses from around half of the society's 130 members, reported 77% (86% in the 2010 survey) of them as enjoying the same or better trade over the year than they had expected, while 23% (14%) said it was worse.
Net sales have also become more stable, with 41% (52%) reporting an increase and 31% (26%) a decrease. The proportion of members trading in a turnover range of £1m-5m has also remained stable at 52% (53%). However, there has been a fall in pre-tax profits, with 56% (44%) reporting around the same results or a fall-off.
One of the most significant changes has been in the principal trading areas: 36% (30%) now deal in Old Masters and British art to 1850, while only 34% (39%) now deal in Impressionist and Modern works.
As the summer fairs season comes to an end, SLAD members reveal which events across the year are now the most important for them.
TEFAF Maastricht remains the favourite fair, accounting for 13% (14%) of all fair participation by members across the globe in 2012. Masterpiece came in second at 10% (no figure available for 2010), representing a quarter of all fairs activity in the UK. Frieze Masters is fast becoming a new favourite, securing 15% of UK fairs activity. The London Art Fair (Islington), having accounted for a quarter of all UK fairs activity in 2010, has slipped to 13%.
The other important fairs in the calendar are the 20/21 British Art Fair (10% of all UK participation), Frieze and the London Original Print Fair (8% each) and the Pavilion of Art & Design (7%).
On a global scale, the trade's focus, as expected, has shifted from West to East. The US accounted for 19% (22%) of fairs activity and European fairs 29% (32%). However, fairs in other places, such as Hong Kong, Singapore, Dubai, as well as Mexico and Brazil were up to 11% (6%).
"With the changing global dynamic of the art market, dealers are becoming more conscious of the need to exhibit in new centres… and are quick to compare the cost effectiveness of the new venues with that of the longer-established fairs. With the cost of exhibiting rising, fair organisers can no longer take dealer loyalty for granted," SLAD warn as traditional fair destinations face challenges from up-and-coming locations.
But there are strong words of advice for the new players too: "Against this background, members who exhibited at these [new] fairs were extremely critical of the organisation and management of the fairs."
On a cheerier note, SLAD members are clearly contributing more to the jobs market than before, with three out of four respondents now providing employment for four or more people in their gallery (including the owner) compared to only half in 2010.
Resale Right Effects
Issues connected with ARR continue to give cause for concern. The proportion of dealers now saying they are affected by ARR stands at 72%, far higher than the 62% quoted in previous surveys, although lower than the 82% expected to be affected by ARR being extended to the estates of dead artists.
Of those affected, 63% (69%) said ARR had lost them sales or caused them to divert sales to other countries where it did not apply, while on average they said that almost 20% (12%) of all sales were affected in this way.
"In a small but not insignificant number of cases the figure was considerably higher," said the survey.
Another area affecting a significant number of members, 80% (76%), is export licensing, with 90% of those affected saying they would welcome the introduction of electronic licensing.