While Many Luxury Item Sales Hurt – Fine Art Sales are Soaring

Lisa Russell owns Russell Collection Fine Art in Austin Texas.

Russell who grew up in Los Angeles surrounded by fine art moved to Austin eleven years ago and opened her gallery nearly nine years ago.

In September 2009, Russell had the opportunity to increase the size of her gallery from 2,800 square feet to 5,000 square feet when the business next to her moved. Her gallery had become too small to handle the size of her inventory of both contemporary museum quality fine art and established world renowned masters like Pierre Renoir, Salvador Dali, and Rembrandt. The decision was hard for Russell. Her gallery was profitable but experienced some downturn in business in 2008 and 2009.

“I struggled with the decision to taken on the extra space and expense given the uncertainty of the economy up to that time,” Russell said. Still her experiences with operating a high end art gallery lead her to believe it was a risk worth taking. Russell Collection Fine Art is on one of Austin’s most traveled roadways and her location was part of the reason she had been so successful during really good times.

With a small amount of remodeling Russell took on the space next to her and now displays contemporary artists on one side of her building and the masters on the other. The added space allows her to display her inventory of over 600 pieces of museum quality fine art in a much more esthetic space.

Since completing her expansion and remodeling in late 2009, Russell has seen a tremendous increase in her business.

Russell has had several near sell out shows this year drawing collectors from all over the U.S. and even some foreign countries; especially a recent show featuring 19^th Century masters.

Russell believes her high end buyers are buying art as much as an investment as a fine piece to hang in their home. “The stock market seems to be the only thing that hurts my business and only when it is down for a few days or weeks.” Russell believes this is because of the psychological uncertainty that a bad day or week in the stock market has on her typical buyers. “Once the market picks back up and shows a sign of rebounding, business comes back.”

Russell is not the only fine art dealer doing well. An August 4, 2010 article in the Wall Street Journal amplifies many of Russell’s experiences, though Russell downplays the investment aspect of fine art and focuses more on wanting to see a buyer find a piece they can fall in love with.

Russell now knows that her decision to expand her gallery space in Austin’s fast growing market was a good decision. She is confident that although the stock market will have its ups and downs, art collectors will still buy museum quality art in order to diversify their portfolio of investments.

Sam Thacker is a partner in Austin Texas based Business Finance Solutions.

You may contact Sam directly at: sam@lesliethacker.com

or follow him on Twitter: SMBfinance

EXTRA: If you have questions for Sam regarding business financing, the credit market, and similar issues, please send an e-mail. Your questions will be recorded and Sam will answer the best ones in his Ask the Expert podcast show.