Improved household expenditure from wealthy consumers will lead to renewed demand.
Los Angeles, CA (PRWEB) August 15, 2013
The Art Dealers industry is emerging from a rough patch. “Like most luxury goods retailers, when the economy took a turn for the worst in 2008 and 2009, demand for original art plummeted,” according to IBISWorld industry analyst Caitlin Newsom. When consumer sentiment declined and disposable income decreased, many consumers reduced their spending on art. As the economy began to stabilize in 2010, art purchases increased, helping the industry's revenue slowly recover. In 2013, revenue is expected to rise by 2.1% to $8.0 billion. During this time, wealthy consumers are expected to increase their discretionary purchases of artwork as their disposable incomes rise.
Revenue for the Art Dealers industry is expected to decrease at an average annual rate of 2.8% over the five years to 2013. This decline is due to the steep drops in revenue during 2008 and 2009, with revenue falling 14.0% and 24.8% respectively, stemming from restrictions in consumer spending. “In addition to a change in demand, firms restructured their business methods, experienced a decrease in foreign buyers and changed their import strategies,” says Newsom. In the five years to 2018, industry revenue is projected to grow further, aided by increasing consumer sentiment and disposable income levels. However, firms will face changes in the international market, with auction houses 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. Due to the small sizes of the operators in this industry, most businesses will continue to maintain only one or two locations throughout the next five years (excluding major players Christie’s International and Sotheby’s Holdings Inc.). Many firms were severely damaged by the recession and are expected to leave the industry over the next five years. Firms will enter the industry at a faster rate than these unprofitable operators exit, however, as rising disposable income will increase total industry revenue. While the industry experienced a severe revenue decline during the economic recession, firms are very unlikely to consolidate due to the independent nature of the business.
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.
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