The art dealer and gallery market - France

1.2 The global market

In **** global sales of art and antiques were valued at **.* billion dollars, shrinking **% from the previous year and **% from ****. As mentioned above, the auction of art accounts for around **% of this market, meaning that the subjects of this study, art dealers and galleries, account for the remaining **% [***]. The market for art dealers and art galleries was estimated at **.* billion dollars in ****.

    Sales in the global art dealer and art gallery market World, ****-****, in billions of dollars and % Source: UBS   The global art market is dominated by the US, China and the UK, with these three countries accounting for over **% of total transactions. These shares have remained relatively stable over the past decade, with only slight fluctuations despite vast swings in both value and volume.

  Global art market share, by value World, ****, in % Source: UBS  

Almost half of the global art dealers and galleries have been in the business between * and ** years, with the proportion of older establishments (***) equalling the proportion of new entrants in the market. This demonstrates that this is still a relatively young and not fully saturated market with potential for growth and a relative difficulty to remain implanted in it

    Number of years in ...

1.3 The French market

France is considered by many as the cultural capital of the world. Therefore, it may be surprising that (***) France only holds around *% of the global art market, in terms of value, making it the fourth-largest market in the world [***].

Major art markets World, ****-****, in billions of dollars Source: ****

As we can see from the graph above, the value of the French art market has remained relatively stable, fluctuating between *.* and * billion dollars. A similar trend can be observed in the British art market, after initially expanding in ****, it saw periods of growth and shrinkage. The Chinese art market meanwhile quickly expanded, reaching a value of almost ** billion dollars in **** and then appears to have mirrored the British one. Meanwhile, the American art market has been constantly growing, reaching a peak value of ** billion dollars in ****. These four markets make up almost **% of the global art market.

As we can see, all these markets lost value in **** due to the COVID-** pandemic (***)

While there are no precise market size estimates for the market of art dealers(***), **% of revenues from art sales are made by galleries and dealers, while the remaining **% are garnered through auctions, following the greater global trend [***]. This allows ...

1.4 Imports & exports

Using the United Nations Comtrade database, we can observe and analyse global trade flows. The market under consideration is categorised under the following code:

** - Works of art; collectors' pieces and antiques

These are the type of commodities that are bought and sold by art dealers and galleries. The figures reported by the UN Comtrade include art from and for auctions as well, however, they are revealing of deeper macro trends that also apply to the market in question.

As we can see from the graph below, France is a net exporter of unique artwork and antiques. However, there is no particular stability with exports decreasing over time and imports fluctuating, resulting in a see-sawing coverage rate.

Imports, exports and coverage rate for goods and commodities registered under code ** France, ****-****

In **** the main French import partners for artwork and antiques were the USA, followed by Switzerland, the UK, Germany, Italy, and Japan.

Main countries of origin for French imports of goods and commodities registered under code ** France, ****, in % Source: ****

The main destinations for French artwork and antiques are quite similar to the import partners, signifying a lot of bilateral trade between these countries regarding these specific commodities. China is ...

1.5 Impact of COVID-19

Globally speaking, the COVID-** pandemic had rather negative impact on the market for art dealers and galleries, decreasing by **% from **** to reach a value of around ** billion dollars [***]. This is due to the enforced closures mandated by governments worldwide and the incompatibility by definition between the nature of the virus (***) due to lower operational costs and effective transitions to e-commerce.

Profitability from art galleries and dealerships, by degree World, ****, in % Source: ****

Despite this overall decrease, online sales reached an all-time high in **** (***).

Prospects for **** are more rosy, with **% of galleries and dealers seeing an improvement, **% predicting stagnation and only **% seeing a further decline [***].

In France, the pandemic had a deeper and more destructive effect on galleries and art dealerships than the global average. In fact, **% of them saw a decline in their turnover, with only **% registering increases in ****.

Profitability from art galleries and dealerships, by degree France, ****, in % Source: ****

If we look more specifically at the breakdown, we can see that more than * out of ** galleries and dealerships registered losses of more than **%, while only *% of them registered gains of over **%.

Variation in the revenue of art dealerships and galleries France, **** (***), in % Source: ****

Regarding employment, **% of establishments maintained the same number ...

2.1 Who buys art ?

There are two important trends to consider in the world of art which shape the dynamics of the market:

It is a globally integrated market (***) It is highly concentrated and correlated with global wealth (***)

Due to these two factors, there is often a similarity between global trends and more localised trends in the art market.

Globally speaking, almost three quarters of purchases in art dealerships and galleries come from private individuals, with the remaining share distributed among art advisors, museums, designers, private institutions and other actors.

Breakdown in art dealer and gallery sales, by type World, ****, in % Source: ****

There appears to be a global trend in dealerships and galleries in terms of client base. In fact, almost three quarters of galleries and dealerships have ** clients or fewer, while only *% of them have over *** clients, and only **% have between *** and *** different clients.

  Number of clients per art dealership or gallery World, ****, in % Source: UBS   Although these represent larger global dynamics, due to the global nature of this market and similarity between local markets, it can be assumed (***) that these trends hold to a similar degree in France.

Regarding the French market more specifically, the most recent available information dates from ****, but ...

2.2 Artistic preferences: contemporary, modern & ancient

Evidently, people who buy artwork and antiques in France appreciate contemporary art. In fact, more than two thirds of art galleries in France sell exclusively contemporary pieces of art, with the total proportion of galleries that sell contemporary art rising to almost more than eight in ten when considering galleries that sell different styles.

    Breakdown in art dealers and galleries, by type of art France, ****, in % Source: CGPA   It appears that the ancient style of artwork and antiques is less appreciated, with only *% of art galleries proposing this style. 

2.3 Preferences in authorship, dead or alive, French or foreign

While, as mentioned above, the majority of galleries are contemporary art galleries, deceased artists are not forgotten and are represented by contemporary, modern and antique art galleries. 

 Only **% of galleries exclusively represent living artists. Representing and selling (***)energising the market of deceased artists is not a risk-free activity, but the uncertainty is of a different nature than that encountered with living artists whose future production is unsure. Working on these two types of profile allows a smoothing out of the business according to a logic of 'portfolio diversification' of activity. The share of living artists is very high in most galleries, since only **% of galleries have less than **% living artists in the range of artists they represent.

The table below outlines the share of galleries in France that have a certain proportion of living artists represented among their artworks. For example: (***) **% of art galleries in France represent exclusively living artists.

Breakdown of art galleries, by share of living artists represented France, ****, in % Source: ****

It appears that French artists are well represented among French art galleries. In fact, almost half of all galleries have a portfolio composed of at least **% French artists. 

Breakdown of art galleries, by share of French artists ...

2.4 New trends in demand: the advent of online sales

Despite a significant decrease in global art sales, online art sales doubles in value from **** to reach a record high of **.* billion dollars [***]. Online sales accounted for *% of total sales in ****, compared to **% in ****, marking the first time that the market share of e-commerce exceeded that of general retail.

When speaking of the gallery and dealer sector specifically, the increase was even more dramatic. In ****, online sales accounted for **% of the total marked, while one year on this share increased threefold to **% [***]. The segment that experienced the greatest increase were artworks that were worth over ** million dollars, with online sales increasing by **%.

In France, online art sales increased by over **% [***]. Due to the restrictions on opening and social distancing as a cause of the pandemic, this became the only sales channel for an extended period of time. **% of online art sales platforms consider that the share of e-commerce will only increase, while **% of them said that they had no intention to open a physical location and instead preferred to maintain their activity strictly online.

If we observe the share of collectors purchasing online, by region and by purchasing method, we can see that French collectors share similar trends to American and ...

3.1 Different sized galleries

Art galleries and dealerships can be very small, nice, family run businesses that specialise in one artist or type of art, or they can be high-end luxurious behemoths that cater to all artistic desire. The case is no different in France. In fact, in **** there were galleries that had revenues inferior to ****** euros per year and a relatively significant proportion with revenues superior to * million euros per year.

Breakdown in art dealers and galleries, by revenue (***) France, ****, in % Source: ****

As we can see from the graph above (***) of galleries in France have a revenue of less than * million euros. **% of French galleries had yearly revenues of over * million euros.

The galleries with the highest sales are older on average than their counterparts, although the reverse is not clear: **% of older galleries are found in the lowest turnover brackets (***) [***]. The location of galleries is also correlated with turnover. Almost **% of galleries located in the regions report a turnover of less than ***,*** euros, and only *% are in the upper ***,*** and only *% are in the upper range of turnover. These proportions are respectively **% and **% for galleries located in Île-de-France (***) [***].

3.2 Primary and secondary markets

The primary market is when an artwork is presented in a gallery or at a fair for the first time. Thus, the price of the work is set for the first time. In more technical terms, a designer, jeweller or artist sets the price with the gallery owner or dealer based on the costs of producing and creating the product. 

If the collector, foundation or gallery sells a work belonging to the primary market, the work then moves into the secondary market. Most works sold at auction, for example, belong to the second market [***].

Six out of ten French galleries complete transactions on both markets, while a third operates exclusively on the primary market. Meanwhile, a small proportion specialises in the secondary market.

    Breakdown in art dealers and galleries, by market France, ****, in % Source: CPGA    

The table below outlines the breakdown in terms of revenue of art galleries and dealerships by market(***) they operate on.

First and second markets, and revenue   Less than €***.*** Between €***.*** and €*.***.*** More than €*.***.*** *st and *nd markets **% **.*% **.*% *st market exclusively **.*% **.*% **.*% *nd market exclusively *.*% *.*% **.*%

The proportion of galleries operating exclusively in the primary market is much higher in galleries with sales of less than ***.*** euros (***) [***].

3.3 Employment

Generally speaking, it seems that almost three in four French galleries are small enterprises, with four employees or fewer. Only one in twenty galleries employs more than ten people. 

Breakdown in dealer and galleries, by number of employees France, ****, in % Source: ****

Galleries with only one location have few staff, with **% of them having fewer than five employees.  Galleries with foreign branches are those which have the highest total number of employees. **% of them have between * and * people and **% have more than ** people.

It is also interesting to see what type of employees galleries have (***).

Median number of employees in art galleries, by category of employee France, ****, in number of employees Source: CPGA  As mentioned above (***) two thirds of galleries maintained the same level of employees due to the COVID-** pandemic, while **% saw a decrease in employment and only *% increased the number of employees.

3.4 Galleries and the digital world

In ****, more than one in four French galleries started updating, improving and modernising their websites. This is a clear impact of the pandemic as more and more business started to move online (***). Almost **% of French are planning to update their websites within the next two years.

Breakdown of art galleries planning to update their website France, ****, in % Source: ****

Subscribing to databases that are useful for management purposes (***) is also a challenge. **% of galleries do not have a subscription, either because they feel they have no use for it or because they or because they consider it too expensive. Only **% of all galleries are subscribed to a database and declare themselves to be satisfied [***].

Art gallery subscription to sales platform, by number of subscriptions France, ****, in % Source: ****

  Art gallery subscription rate to data bases France, ****, in % Source: CGPA  

4.1 Age and geography

The average French art gallery is ** years old. Almost six in ten galleries are under ** years old, with only **% of them being over ** years old.

Breakdown of art galleries, by age France, ****, in % Source: ****

An overwhelming majority (***) establishment is.

  Breakdown of the location of the second establishment of art galleries, by location France, ****, in % Source: ****

4.2 Expenses for art galleries

On average, galleries estimate that expenses encompass between **% and **% of their total revenues [***]. The graph below the different areas of expenses and the proportion of their revenues which galleries spend on them.

Breakdown in expenses for art galleries, by type of expense (***) France, ****, in % of galleries Source: CPGA  To clarify, **% of galleries declare that personnel charges (***) represent between *% and **% of their revenue, while **% declare that these charges represent between **% and **% of their revenue.

Of galleries that rent out their locations, three out of four rent it out from companies, while only **% rent it out from individuals.

Breakdown of the landlords of art galleries, by type France, ****, in % Source: ****

4.3 Sales

As mentioned above, more than **% of art purchases are completed by individuals. It is interesting to analyse to whom art galleries sell art to. Half of galleries in France sell to businesses and museums. One fifth of galleries sell to FRAC (***).

Main buyers of art from art galleries (***), by type France, ****, in % Source: ****

NB The sum exceeds ***% because the same gallery can sell to different entities.

4.4 Priorities and outlooks for the future

The thing that three quarters of French art galleries are looking forward to in the future is the return of art fairs and trade shows. Two thirds also consider client and collector relationships and networking among their priorities for the future. Issues such as environmental responsibility and the search for new artists are a priority for only *% and **% of art galleries, respectively.

    Named priorities for art galleries for the future France, ****, in % Source: ****

5.1 International regulations

Property looted during the Second World War is internationally prohibited from sale and must be returned to its owners or rightful claimants [***]. 

In ****, as part of the fight against the financing of terrorism, the UN Security Council adopted Resolution **** which prohibits trade in goods "illegally removed from Iraq since * August **** and from Syria since ** March ****", and the European Commission wants to impose a new licensing system since July **** [***].

Works of art are not "free to move" within the European space and cannot be exported without permission from customs and the Ministry of Culture. Stolen objects - and declared as such - on databases such as that of the Central Office for Combating Trafficking in Cultural Goods are also prohibited from sale.

Works of art made from endangered animals are also prohibited from sale and transport under the **** Washington Convention on International Trade of Endangered Species (***) [***].

Since January ****, the European Union has enforced the AMLD* rules. They aim to combat money laundering for the benefit of terrorism in the Member States. The art market is one of the sectors targeted by these rules, with obligations of clarity and transparency on the identities of buyers, sellers and the various actors in a transaction ...

5.2 French regulations

Since the law of ** November ****, there is no time limit on the handling of stolen works of art.

The French Ministry of Culture annually releases a Deontological Code for Art Galleries. This document

This reference tool makes it possible to enhance and secure the profession of gallery owner and its professional environment. The Code aims to recall the rights and obligations of art galleries and dealers. It sets out the professional relations with artists and the beneficiaries of an artist's rights; presents the relations with buyers or sellers; but also the relations between colleagues. It sets out relate to the applicable legislation, case law and regulations. They are also based on recognised professional practices, while respecting the interests of each party. The galleries that are members of the Professional Committee of Art Galleries (***) act in accordance with their legal obligations and undertake to respect this Code.

Other regulations pertaining to this market can be found (***) below:

(***) Articles ***-* and R***-* to R***-* of the Criminal Code Article *** VI of the General Tax Code

6.1 Segmentation

• Sotheby’s
• Christie’s
• Drouot L’Hotel
• Artcurial
• Piasa
• Aguttes
• Tajan
• Galerie Kamel Mennour
• Galerie Thaddaeus Ropac
• Galerie Vallois
• Iris Galerie
• Art Basel
• Galerie Perrotin
• Yellowkorner
• Galerie Karsten Greve
• KazoArt
• Millon & associés
• Mypoparts
• Daniel Templon Galerie
• EAC École Artistique et Culturelle
• Beaux Arts Magasine
• Bonhams
• Ceysson & Bénétière Galerie