Despite reports of market contraction and high-profile closures like Poe in Los Angeles and Venus Over Manhattan in New York, smaller galleries outperformed expectations. For the purposes of this analysis, smaller galleries are defined as those with an annual turnover below $250,000.

The 2025 Art Basel & UBS Global Art Market Report by Clare McAndrew indicates that small galleries achieved approximately 17% year-over-year growth, in contrast to a 12% decline in the overall market. This relative outperformance is due to a reduction in high-value transactions and increased fixed costs, such as rent, art fair fees, and global operations, which have compressed profit margins for larger galleries. The report also notes increased activity for works priced under USD 5,000, a segment driven mainly by smaller galleries, emerging artists, and direct gallery-collector relationships, rather than major galleries or auction houses.

McAndrew’s analysis stresses the key role that small galleries play in expanding the collector base.

About half of the buyers at the smallest galleries were new clients, a much higher proportion than at larger galleries. This is especially notable during a period of declining transaction volume. While fewer works are changing hands globally, strong participation at accessible price points indicates that engagement is being rebuilt from the ground up, rather than maintained only at the top of the market.

Data from 2025 indicate a continued decline in reliance on art fairs as a primary sales channel, especially among smaller galleries.

While fairs remain important for visibility and validation, many small dealers report an increasing share of sales from:

This shift is driven in part by economic reasons, as participation in fairs has become prohibitively expensive for many galleries. It also reflects evolving collector behavior, with buyers increasingly engaging with trusted galleries outside the temporal limitations imposed by fairs.

A frequent misinterpretation of recent data is the assumption that slower sales reflect declining interest. However, McAndrew’s findings show the contrary.

Collectors are taking more time to acquire works but are engaging more deeply in the process. This results in fewer transactions but reflects greater due diligence, longer discussions, and a preference for understanding context over immediate acquisition.

For smaller galleries, this environment can be advantageous. Their scale allows for closer relationships, stronger narratives, and greater flexibility in presenting artists and works.

The 2025 art market is not experiencing uniform contraction. Instead, activity is shifting toward segments defined by access, relationships, and affordability. For collectors who focus on data rather than headlines, this shift clarifies where discovery occurs, how confidence is built, and why less visible market segments may now hold greater cultural and financial significance.