The Storm Hits the Art Market By Katya Kazakina, September 7, 2025 --- Overview The art market is undergoing a significant and ongoing contraction entering the second half of 2025, with numerous established galleries closing and major collectors pulling back. Overheads remain high amid declining sales, causing a structural downturn rather than a temporary cyclical adjustment. --- Case Study: Clearing Gallery's Decline In June 2025, Clearing gallery opted out of Art Basel to save costs, transforming a villa in Basel into “Maison Clearing” to showcase works by 46 artists. Despite positive reception, sales could not cover the $150,000 monthly operational costs across two locations. The gallery announced closure in August 2025 and is moving toward bankruptcy with landlord lawsuits due to unpaid rent. Owner Olivier Babin emphasized survival over tradition and lamented the unsustainable gallery business model. --- Industry-Wide Struggles Multiple gallery closures in 2025, including Blum, Venus Over Manhattan, Kasmin, signal deeper fissures. Analysts highlight bloating in galleries, artists, advisors, and fairs—calling for significant downsizing. Auction sales dropped 8.8% in H1 2025 to $4.72 billion, a 40.9% decrease from 2022. The Art Dealers Association of America canceled The Art Show. Art supply companies confirm declines since summer 2022, highlighting less artistic production. --- Financial Evidence from UK Galleries Sadie Coles HQ reported sales dropping from £59 million in 2023 to £28.6 million in 2024. After-tax profit margin shrank from 7.2% to 0.7%, underscoring monetary pressures. --- Market Sentiment and Collector Behavior Dealers and advisors express rare openness about doom and gloom in the industry. Industry experts like Alain Servais describe the situation as structural, predicting "blood will flow" before a new balance emerges. Notable collectors such as Beth Rudin DeWoody and Dean Valentine are cautious, cutting back on acquisitions. DeWoody’s decreased buying results in psychological and economic market ripples; she's seen as a bellwether collector. Buyers who viewed art as an investment have largely exited, leaving a market corrected from speculative excess. --- Primary Market Challenges Galleries raised primary market prices during the pandemic-driven boom to curb speculation. Many top artists now fetch auction prices at half the gallery retail value, e.g., Shara Hughes and Dana Schutz. Sales cycle lengthened: deals once closed in hours now take weeks. Some galleries successfully sold most works in recent shows, demonstrating the market still functions for the "right" artists. --- Emerging Positive Trends Younger galleries with low overheads (e.g., Sebastian Gladstone) expand and cater efficiently to collectors. Nomadic and flexible business models, exemplified by Robbie Fitzpatrick and Leo Koenig, adapt by minimizing fixed costs and leveraging unique geographic and social experiences. Koenig operates galleries seasonally in Palm Beach and the Catskills, creating collector experiences that drive engagement and sales. Some dealers view current downsizing as a generational transition akin to "the rise of the mammals" after dinosaurs’ extinction. --- Conclusion While the art market faces a deep crisis marked by widespread closures, falling sales, and shifting collector behavior, adaptive strategies by emergent dealers and galleries suggest potential pathways to renewal. The prolonged adjustment may reshape the industry, demanding leaner operations and new collector engagement models. --- Tags Art News Artnet Pro Intelligence Report