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Contemporary art fares better for dealers than old masters during Covid-19 pandemic

The Art Market 2021 Report is out. This Art Basel and UBS survey has been prepared by Dr. Clare McAndrew, Founder of Arts Economics. The Pothi team brings you excerpts and overviews of this incisive report. This is part 3 of a six-part series. You can read part 1 here and part 2 here


While the dealer sector has been one of the most resilient parts of the market in recent years, the COVID-19 pandemic and the unpredictable environment it created presented businesses with significant challenges in 2020. Although many businesses continued making sales throughout the year, including those at the high end of the market, the fallout from this crisis had a negative effect on aggregate sales, with values declining by 20% to $29.3 billion in 2020, after a marginal increase of just over 2% in 2019.

The effects of the crisis were also not evenly distributed within the sector, with dealers in different regions and value segments faring very differently, including a minority who experienced an increase in sales. Some businesses closed, and the extent to which others will survive over the coming years is still to be determined.

However, a notable development in 2020 was that some dealers managed to maintain and even enhance profitability with costs also decreasing – one of the more striking outcomes during the year.


Prior to 2020, this sector tended to be a top-heavy, winner-take-all market, with businesses at the higher value end tending to show stronger growth in sales in most years than small and mid-sized businesses. One of the biggest concerns in 2020 was that the pandemic and resulting economic crisis could intensify this polarized framework, accelerating the decline of smaller businesses and strengthening the position of the biggest dealers that might have more financial leeway and whose buyers might also enjoy a greater degree of insulation from the cultural and economic traumas of COVID-19.

Although the longer-term effects of the pandemic are still unfolding, the sales results for the year indicated that some of the largest galleries were among those experiencing the most significant declines in sales. However, businesses at all levels were forced to review their strategies in the face of changed consumer behaviors and new economic realities, and the pandemic has brought structural change to the sector that may extend well beyond 2021.

After a relatively stable year in 2019, sales in the dealer sector came under significant pressure in 2020. The sector was uniquely vulnerable to the impact of the COVID-19 crisis as it is primarily based on discretionary spending and strongly dependent on travel and in-person contact. While many businesses managed to maintain sales throughout the year, the value of these sales declined significantly. By mid-year, 83% of the contemporary and Modern galleries surveyed in July had reported a decline in the value of their sales, with an average loss of 36% in value. By the end of 2020, across all sectors, the dealers surveyed reported an average year-on-year decline of 23%.

Dealers working in the contemporary art market tended to fare better than others, with a decline of 20%, versus a 39% average drop in sales for businesses operating in older sectors of the market such as Old Masters and Impressionism.

Dealers in decorative art, antiques, and antiquities markets also reported a higher-than-average decline of 33%. Dealers operating solely in the Modern art sector experienced an aggregate fall in sales values of just less than one third, slightly worse off than their peers who mixed contemporary and Modern art (with a 29% loss).

When dealers were asked at the end of 2019 about the year ahead, most had been optimistic, with 75% predicting stable or better sales in 2020. None could have anticipated the crisis that was to come. The COVID-19 pandemic has been a significant economic challenge to dealers around the world, as it has to millions of small businesses in other industries.

When surveyed mid-year in 2020, contemporary and Modern art dealers had a generally pessimistic outlook: 79% of those surveyed thought overall 2020 sales would be lower than 2019 and, of those, 58% felt they would be significantly lower. This turned out to be an accurate prediction of the year, as the end-of-year survey indicated that 74% of dealers experienced a drop in sales (including nearly half of the sample seeing a decline of one third of their turnover or more).

Looking forward to the year to come in 2021, the majority of dealers surveyed expected an improvement in sales:

– 58% expected an improvement in sales in 2021, including 16% predicting a significant improvement;

– 27% expected sales to be about the same as in 2020; and

– 15% expected sales to decrease

Although this shows a much more optimistic picture than the mid-year survey, it indicates that a significant 42% of dealers still expect sales to be stagnant or worse in the coming year. Given 2020 was a relative low point for many businesses, this reveals continuing pressures in some parts of the market.


A majority of dealers at all levels of turnover expected sales to improve, but the largest businesses, who had the most significant sales declines in 2020, were the most optimistic about 2021. (65% of dealers with turnover greater than $10 million expected an increase in sales in 2021.) Those in the ranges from $500,000 to $1 million and $1 million to $10 million were slightly less optimistic. Anecdotally, these dealers also reported concerns over the viability of art fairs in their traditional form in 2021 and the effect this might continue to have on their businesses given their reliance on fairs to generate sales, particularly to new buyers.

The ability to reduce major operating costs in 2020 (most notably art fairs and travel) allowed some dealers to maintain net revenue in the face of declining sales. While 54% of businesses reported that they were less profitable in 2020 than in 2019, 18% maintained a stable level of net profit and a significant share of 28% reported being more profitable (with 7% significantly more so).

The trend that was noticed is that small and mid-size galleries that are used to operating with lean and efficient structures flourished this year. Large and overstaffed galleries took the biggest hit. Emerging artists at lower price points sold well.

While some dealers managed to maintain profits in 2020, some feared that the strategies they had employed to do so were not sustainable and could affect their businesses in future, as a radical reduction in their staff or the cessation of external exhibitions and fairs threatened to reduce their access to new buyers.

“…By reducing our costs significantly in 2020, we managed to be more profitable. Of course, this was at the cost of losing more than half our staff…”

Some smaller dealers also noted that the increase in online-only outreach had ‘levelled the playing field’ to some degree, allowing dealers of all levels to reach potential collectors without some of the hierarchies often present in offline events.

When asked what share of their sales went to different buyer segments, respondents reported:

– 33% went to new buyers that were buying from them for the first time in 2020;

– 37% were buyers they had dealt with for one to five years; and

– 30% were buyers they had dealt with for more than five years.

Smaller dealers represent more female artists

Gender disparities in the art market continued to be a focus of this research in 2020, and changes towards increasing equity in sales and representation have been slow to materialize, with the statistics of recent years confirming a lack of gender parity in the dealer sector and elsewhere in the art market. Across all respondents in all sectors, the representation of female artists by dealers was stable at 37%. Larger dealers tended to represent fewer female artists than their smaller peers, and this is connected to the tendency for there to be less female artists at the top end of the market, a finding that is also paralleled in the auction sector and in exhibitions.


a. The fallout from the COVID-19 crisis had a negative effect on dealer sales, with aggregate values declining by 20% to an estimated $29.3 billion in 2020, after a marginal increase of 2% in 2019.

b. A survey of the dealer sector at the end of 2020 revealed an average year-on-year decline in sales of 23%. The most significant average annual declines were reported by dealers with turnover greater than $10 million, at 31%.

c. The ability to reduce major operating costs allowed some dealers to maintain profitability in 2020: 28% were more profitable than in 2019 and 18% maintained a stable level of net profit.

d. Almost half (48%) of dealers surveyed accessed loans for their businesses over 2020, with 68% availing of government lending or other repayable credit.

e. The size of dealers’ client bases shrank over 2020, with an average of 55 individual clients, down from 64 in 2019.

f. Dealers’ top priorities shifted markedly over 2020 to focus on existing clients, online sales, and finding ways to cut costs. Client relationships, online sales, and art fairs were their top priorities looking ahead to 2021.

g. The majority of dealers (58%) expected an improvement in sales in 2021, while 27% predicted they would be stagnant and 15% expected them to decline further.


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