Improved household expenditure from wealthy consumers will lead to renewed demand
Los Angeles, CA (PRWEB) June 28, 2012
The Art Dealers industry is emerging from a rough patch. Like most luxury goods retailers, the industry experienced a surge in demand while the economy was booming and wealthy consumers were splurging on original art. However, when the economy took a turn for the worst in 2008 and 2009, demand for original art plummeted. “When consumer sentiment declined and disposable income decreased, many consumers reduced their spending on art,” says IBISWorld industry analyst Justin Waterman. As the economy began to stabilize in 2010, art purchases increased, helping the industry's revenue to slowly recover by 3.0% and a further 4.5% in 2011. In 2012, revenue is expected to rise by 2.5% to $8.8 billion. During this time, wealthy consumers are expected to increase their discretionary purchases of artwork as their disposable incomes rise.
Over the five years to 2012, Art Dealers industry revenue is expected to decrease by an average rate of 3.4% per year. This decline is not constant because drastic fluctuations in revenue occurred during this period, including a 16.1% decline in 2009 stemming from restrictions in consumer spending. “In addition to a change in demand, firms restructured their business methods, experienced an increase in foreign buyers and changed their import strategies,” adds Waterman. In the five years to 2017, industry revenue is projected to grow, aided by increasing consumer sentiment and disposable income levels. However, firms will face changes in the international market, with auction houses like major players Sotheby’s and Christie's International moving more sales abroad. Additionally, companies are expected to increase their presence on the internet.
The Art Dealers industry is highly fragmented and most firms have one to four employees. Because of the small sizes of the US businesses in this industry, most businesses will continue to maintain only one or two locations throughout the next five years. IBISWorld estimates that about three fourths of businesses in this industry are run by single owner/small family businesses. Many firms suffered financially during the recession and some, irreparably damaged, are expected to leave the industry in the next five year period. However, firms will enter the industry at a faster rate than others exit in light of a shiny future, polished by forecasted rising disposable income. Consolidation is not anticipated to occur due to the highly independent nature of most galleries and dealers choosing to close rather than consolidate. In 2012, the number of companies in the industry is expected to total 22,914, down from 25,348 in 2007. For more information, visit IBISWorld’s Art Dealers in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes art galleries and art auction houses that primarily retail original and limited edition artwork. The companies purchase artwork from an artist or individual owner and then sell the artwork to consumers, with little or no further development of the product.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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