The closure of several prominent galleries over the past 18 months has prompted uncomfortable questions about the financial pressures at the top of the art market.
First came Clearing. Then Blum. Most recently, Stephen Friedman Gallery confirmed its closure after reporting a £1.7 million loss in 2023, attributed largely to investment in its London premises and expansion in New York.
These are not fringe operators. They are established, blue-chip businesses representing some of the most sought-after artists in the world. Yet even at this level, the economics are proving fragile.
A significant part of the strain lies in the art fair circuit. Participation in leading events such as Art Basel, Art Basel Miami Beach and Frieze London requires substantial upfront investment. Booth fees alone can reach six figures, before shipping, insurance, staffing and hospitality costs are added. For galleries attending multiple fairs annually, the cumulative outlay runs into the millions.
Yet visibility at these events is not optional. In an increasingly globalised market, sustained presence signals relevance. Scaling back risks slipping from collectors’ view — and from the institutional conversations that shape reputations and careers.
At the same time, galleries shoulder long-term commitments to artists, often financing exhibitions years before commercial return is assured. Expansion into new cities, larger spaces and international programming can appear ambitious, but it is often a defensive strategy in a competitive market where standing still can mean falling behind.
In a buoyant economy, such risks can be absorbed. In today’s climate of slower sales cycles and cautious buyers, they become far harder to sustain. The recent closures suggest that even the most respected galleries are not immune. The art market may still generate headline sales, but beneath them lies a business model under increasing strain — one in which the cost of staying at the top continues to rise.