A 2020 mid-year survey

The Impact of COVID-19 on the Gallery Sector

A 2020 mid-year survey

The art market has often shown resilience to events in the wider economic and political environment. Yet the unpredictable world created in the first six months of 2020 has presented the market — and the gallery sector in particular — with some of its biggest challenges yet.

Key Findings

Employment

Despite already having very tight employment structures, many galleries have had to furlough or permanently lay off staff in response to the COVID-19 crisis. One third of galleries surveyed downsized their staff in the first half of 2020. Despite starting the year with an average of only five employees, galleries with turnover of between $250,000 and $500,000 reported the largest share of those downsizing, at 38%.

Change in Gallery Employment in H1 2020

Sales

Comparing the first six months of 2020 with the same period in 2019, galleries reported that the value of their sales fell by 36% on average (with a median decline of 43%). Smaller galleries, with turnover of less than $500,000, reported the largest declines in sales.

Change in Total Gallery Sales from H1 2019 to H1 2020

Looking ahead, the majority of galleries expected sales to continue to decrease, with only 21% expecting an uptick in the second half of the year. There was more optimism in 2021, but even so, only 45% of galleries expected sales to increase from 2020.

Gallery Views on Future Sales

Online Sales

The share of online sales rose from 10% of total sales in 2019 to 37% in the first half of 2020. Despite having the lowest share in 2019, galleries with the largest turnover showed the highest increase, with those in the $10 million-plus segment rising almost five fold to 38%.

Average Share of Sales by Sales Channel in 2019 (Turnover-Weighted)

Average Share of Sales by Sales Channel in H1 2020 (Turnover-Weighted)

Art Fairs

The cancellation of art fairs meant galleries’ sales via this channel were radically reduced in the first half of 2020 to 16% (compared to 46% in 2019). Looking forward, most galleries (91%) predicted art fair sales would not improve in the second half of 2020, and only one third thought they would increase in 2021.

Share of Art Fair Sales in 2019 versus H1 2020

HNW Collectors

Although the COVID-19 pandemic distracted many HNW collectors from their collections in the first half of 2020, the survey indicated that most had remained active in the market, with 92% having purchased a work of art in the first six months of the year.

Share of Collectors by Level of Total Expenditure in H1 2020

Of the HNW collectors surveyed, 75% had purchased via a gallery in 2020, and 41% were focusing only on galleries they had bought from before and had established relationships with. Only 14% of the collectors surveyed were actively looking for new galleries.

Collectors’ Focus Regarding Galleries during the COVID-19 Crisis

Despite the ongoing restrictions on travel and events, most collectors (82%) were still actively planning to go to exhibitions, art fairs, and events in the next 12 months, and a majority (57%) hoped to attend these events both locally and overseas.

Planned Attendance at Local and International Events in Next 12 Months

Across all of the HNW collectors surveyed, 59% felt the COVID-19 pandemic had increased their interest in collecting, including 31% saying that it had significantly done so.

Interest of HNW collectors in times of COVID-19

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