What’s in the Back Room?

Once upon a time--many decades ago, when high-level art dealing was a relatively leisurely business--the private chambers of prestigious art galleries were scenes of seduction and drama. Operating well out of the public eye in well-appointed “closing” rooms, gentlemanly merchants finessed deals with Old World ceremony as they persuaded the nouveaux riches to build collections of works by European Old Masters, French Impressionists and early Modernists.

Here’s how it worked: While ordinary browsers viewed an exhibition in the gallery’s public space, preferred clients were ushered into the inner sanctum to see specially selected artworks. The dealer would close the door and offer the guest a seat on a richly upholstered couch or chair. Next came a round of drinks--maybe a glass of fine wine or cognac--and convivial conversation.

When the mood was mellow and the client seemed receptive, the dealer would bring out a painting or sculpture and adjust the lighting so the artwork glowed and everything else faded into shadows. In galleries particularly attuned to the theatrics of wooing collectors, art handlers wore uniforms with white gloves and closing rooms were furnished with velvet curtains that could be opened at the right moment to reveal the object of desire.

In today’s relatively streamlined art world, in which the typical high-end art gallery is an austere white space, traditional closing rooms can only be found at a few old-fashioned establishments and in the reminiscences of veteran dealers who once plied the carriage trade. About the only device that can be compared to the velvet curtain is the high-tech, compact storage system, in which a panel of art glides into view with the push of a button, says dealer Louis Stern, a specialist in Impressionist and Modern art who owns a gallery on Melrose Avenue.

But if the trappings and style of art dealing have changed, back-room business continues unabated, particularly in galleries that are actively involved in the secondary market--buying and selling pre-owned artworks. In Los Angeles, behind-the-scenes action is more important than ever as dealers struggle to make a living by selling art--”the ultimate discretionary goods,” as Stern puts it. “When the economy goes bad, it’s the first thing to go. When the economy improves, it’s the last thing to come back,” he says.

Given that fact of life, many local galleries couldn’t survive on sales from exhibitions alone, so the art on view at any given time is only part of what is actually available. While the shows bring in the public and attract attention in the press, they are often loss leaders for back-room sales. Indeed, a single six- or seven-figure deal can keep a gallery afloat for several months.

As summer settles in, bringing the usual smattering of shows pulled from inventory, some L.A. galleries offer a glimpse of material usually found in their private quarters. “Summer Group Exhibition” brings back-room holdings up front at the Manny Silverman Gallery, a well-known West Hollywood showcase for New York School painting. Meanwhile, Stern is gearing up for a fall survey of the career of Pablo Picasso, an artist whose work he usually sells out of the back.

But back-room dealing is a year-round practice, and not only at galleries that concentrate on the secondary market. Prominent contemporary art dealers--including Margo Leavin, Patricia Faure, Jan Baum, Joni Gordon at Newspace and Peter Goulds at L.A. Louver--not only work with the secondary market of artists represented in their galleries, but sometimes reach well beyond the territory with which they are usually identified.

“Since 1990, there are no more specialists in the art business,” Stern says, referring to the period following the crash of the art market, when dealers have had to be particularly creative to stay in business. “In addition to Impressionist and Modern works, I have sold Old Masters, 18th century French Rococo, 19th century Romanticism, Barbizon and Salon pictures.”

And back-room transactions don’t always follow a predictable path. A collector who comes to Silverman’s gallery to see an exhibition of works from a particular period by Hannalore Baron, Sam Francis or Robert Motherwell may end up buying one of the artist’s works from another period out of the back room. Or the collector may emerge from the gallery as the new owner of a piece by an entirely different artist.

Actress Whoopi Goldberg stopped by Stern’s gallery to see an exhibition of drawings by European and American masters. After being shown works by Alfredo Ramos Martinez in the back room, she opted for a painting by the Mexican muralist. On another occasion, when the gallery had a Ramos Martinez exhibition on view, film director Oliver Stone bought a painting from the show but also purchased Andy Warhol’s portrait of Chairman Mao from Stern’s back room.

Both Stern and Silverman make the majority of their sales from exhibitions but derive more revenue from the back room. While the balance of trade varies widely at other L.A. galleries, most dealers depend on some sort of back-room business, often with dealers and collectors in other cities.

Tobey C. Moss, who has carved out a niche for herself in the field of California abstraction and Modernism, does 60% to 70% of her business out of town with people who rarely see the exhibitions at her Beverly Boulevard gallery. But a collector from Boston recently sought her out, dropped in at the gallery and purchased a small painting and four drawings by Lorser Feitelson, a pioneering abstractionist--all from the back room.

Jan Baum is well known for showing contemporary art at her gallery on La Brea Avenue, but she has always dealt with African art as well. “I do it because I love it,” she says. Although the supply has dwindled, African material continues to be a supplementary source of income for her gallery.

Another longtime contemporary art dealer, Joni Gordon, who owns Newspace in Hollywood, is not known for her work in the secondary market either. She only pursues special pieces valued at more than $100,000, she says, but she has sold paintings by Mark Rothko, Helen Frankenthaler, Georgia O’Keeffe and Willem de Kooning and a major bronze sculpture by Henry Moore.

Back-room business flourishes for a variety of reasons, mostly economic. The primary factor is that exhibitions are expensive to produce and the sales they generate may not even cover costs, much less pay the gallery’s overhead.

“Numerous expenses are incurred before an exhibition opens,” Stern says. “There’s the design, printing and mailing of the brochure and press release, photography, the installation of the work, which may require bringing in an outside installer, and wine and refreshments for the opening reception. This can easily add up to $8,000 to $12,000; when international shipping is required, the total cost is much higher.”

If the exhibited works are priced at $10,000 apiece or more and if they sell briskly, no problem. But the typical fare in local galleries is contemporary art priced in the range of $2,000 to $5,000. Even if such a show sells out, which is a rare occurrence, the total may amount to less than one back-room deal. An exhibition can be well received by both critics and collectors and still only break even.

Presenting higher priced art can be an even greater financial risk. The potential for making a profit is higher, but so are expenses. “When I bring in a show from Europe, it can easily cost $5,000 to $6,000 just to import the work,” Stern says. “When I go to the expense of putting together a major modern exhibition with a catalog, shipping, insurance and all the ancillary costs, and little or nothing sells, it’s a bleak picture.”

Another reason for back-room sales of big-ticket items is that it is much easier to find a single, superior work by a major artist than to amass enough material for an exhibition. When dealers acquire a special piece that seems suited to one of their clients, they simply call the collector and arrange a private showing.

And privacy is essential for collectors who are concerned about security or simply don’t want outsiders to know how they spend their money. Dealers try to cultivate long-term relationships with special clients, building a feeling of trust that is mutually beneficial.

Back rooms obviously lend themselves to these private transactions, whether the physical facilities are sleek offices, commodious display spaces, warehouse-like racks or cozy niches. Gordon says she has three back rooms: a storage area where works are under wraps, her office and “the one I keep in my head for one person.” That unnamed client’s wish list is in her mind as she searches for works to suit the collector’s taste.

Jan Baum has come up with yet another variation: a small room in the rear of her gallery hung floor-to-ceiling with works by many different artists. “It’s like a big closet; I call it my organized back room,” she says. The salon-style display allows visitors to sample the gallery’s stable and provides a place for Baum to test the work of new artists.

But if definitions of back rooms vary, they are all driven in part by a certain mystique. “People love the sense of discovery,” Stern says. “They are thrilled to be able to tell someone, ‘You know, I found this in his back room.’ There’s nothing like a great find.” Indeed, many people can’t resist peering into private spaces to glimpse art that is not exhibited or asking if other works are available in the back, dealers say.

“Everyone loves to go through bins,” Silverman says.

And playwright Edward Albee, an old friend and longtime client of Gordon, does exactly that when he visits Newspace. “He loves to be left alone to go through drawers and unwrap things. That’s how he finds things,” she says. Similarly, film director Billy Wilder, an inveterate collector who has collaborated with Stern as an exhibition curator, always checks out Stern’s back room when he visits the gallery.

But dealers can’t open storage racks of valuable artworks to casual browsers, or spend much time with them on the off chance that they will turn into serious collectors. “The thing most dealers object to is people who say they are looking but they don’t know what they are looking for,” Silverman says.

So, if back-room sales are so much more lucrative than exhibitions and maintaining a facility that’s open to the public is so much trouble, why have a gallery?

“You ask yourself that every time you write a rent check,” Silverman says. “It’s what I do; it’s what I like. Los Angeles isn’t such an open city to painting, but in my exhibitions I like to do as much as possible to show what abstract painting is about. I could probably do as well financially if I worked privately in the secondary market. But I like it here, where people come in and we laugh and talk. If I just went to the office, it wouldn’t be as much fun. It would be too much of a business.”

Stern agrees: “In Los Angeles you are almost obligated to operate a street-level storefront to bring people in. It’s convenient and it builds credibility; people who are not in the habit of buying art are buttressed by walking into an established gallery. But it’s a double-edged sword for me. It would be much easier if I didn’t have to maintain a gallery. Nevertheless, I enjoy presenting shows that no one else has done in Los Angeles, like the work of Fernand Leger and my retrospective of Jacques Villon. It gives me a great sense of accomplishment and that’s what it’s all about.”