THE CUTTING EDGE
The critical factors for success as an art gallery are artists and location. The space has to have enough road visibility that collectors can find you, but also keep its air of exclusivity. First floor is a must. The best buyers don’t like to wait to take an elevator, and a second-floor location translates to second rate. A gallery showing contemporary art has to have high ceilings and good light. In New York, it helps to situate where the next happening spot will be. For Bernard, luck was on his side. Chelsea was just starting to be found. He didn’t have to be the first, but was early enough to get a deal on a long-term lease.
A great 4,000-square-foot, first floor rental had just come available at what would soon become a central location for art galleries. It was 1986 and the art market was just getting ready to make a bull run. The space had been one of the first galleries in Chelsea. The owner, a very wealthy gay man, had done $75,000 in renovations and only been opened for one year when he came down with a rare cancer usually associated only with older individuals: Kaposi’s sarcoma. No known cure and he failed quickly. Years later, it would be obvious this was one of the early cases of AIDS. The space had been empty for almost a year, and when Bernard offered to pay a year in advance on a 20-year lease, he got a screaming deal. The landlord was older and figured the guarantee would get him through his life and he could let the kids worry about the lease afterwards.
Fredrick Marsh signed the rental agreement and the $35,000 for the first year’s lease was paid up front. The space was ready to go. Great birchwood thinly planked floors and high, white walls with professional track lighting already in place. An excellent security and sound system were part of the package.
The Cutting Edge was born. A copper sign with the gallery’s name in bold letters just slightly tilted to the right was fitted above the front door. It was backlit so the letters popped at night. You couldn’t miss seeing it from all four corners of the intersection.
The first order of business was to lock down the Warhols. The importance of these paintings was critical to Bernard’s plan. Without the paintings, he was probably fucked. He knew Marsh’s cavorting nudes would be extremely hard to sell, even for him. The graphic nature was so shocking it was just too hard to wrap a plausible story around them about how this work would ever be valuable. His “Paint by Numbers” sales pitch would never fly, even for him. If he got Warhols on most of the walls, a few other good artists would be sure to follow and he could make money, especially with the Rolodex and Marsh’s capital.
With Warhol’s work, he would have something of quality to advertise that qualified him as a player. It was possible to have a splashy grand opening, hopefully with Warhol in attendance, and minimize Marsh’s presence.
Bernard came up with a genius idea. He broke the gallery into two sections. Up front was a very public Warhol area. In back he hung huge black-satin curtains in front of a small aluminum opening fashioned after an igloo. To get to the cadaver paintings required entering the igloo that had the words “Really Cutting” above it. Bernard’s pitch to Marsh was that his work needed to stand alone, and not be tainted by Warhol’s. After all, Andy was simply an illustrator and Marsh was a true artist. By making it ultra selective, it was like standing in line to get into a hot nightclub: the Studio 54 effect of the late 1970s. Marsh loved the idea. It made him feel special, like a star.
In reality, Bernard wanted to keep the public from seeing the work if possible so as not to damage his reputation as a dealer with a good eye for artists. He explained Marsh’s work was disturbing and one had to understand that fully before entering. He might even be able to spin it to some collectors who liked forbidden fruit kind of art. Bernard was the master when it came to fruit.
If you warn most reasonable people they won’t be able to handle art like this, that it takes a special, open-minded person to understand disturbing imagery, the majority of art collectors simply will avoid what is going to be very distasteful, not wanting to upset their artistic harmony. But there are people who want things they are told are not good for them. They have to have it. For this rare freaky person, Marsh could conceivably be a match. Purchasing a Marsh was like considering a camper eaten alive by a grizzly bear as art; it could literally damage your aesthetics for life.
Warhol’s Factory in midtown Manhattan consisted of an amazing group of misfits and geniuses. Assistants made silkscreen prints while Warhol focused on major paintings. The place ran at full tilt to satisfy the many gallery orders, but didn’t overproduce. You can’t flood the market. Andy Warhol was an astute businessman. When Bernard Phillips, who had sold over a million dollars of his work in barely a year at Brit’s, came looking for more art, Andy had to listen.
“So Bernard, why did you leave Brit’s? You seemed so happy and you sold so much of my work. Brit told me you already were working at another gallery. He said it was some little mom and pop start-up. I don’t get it?”
“I enjoyed working at Brit’s, and as you are aware I sold more of your work than all the rest of the staff put together, but an opportunity came up I couldn’t ignore. I found a great gallery that is well capitalized and they love your work. Which is why I made the move from Brit’s. They get you. This gallery will be a powerhouse and a market maker in the art world in short order. All art purchases and the artist stable are my decisions, and of course you are my favorite artist on earth, so I want the main focus of the gallery to be on your work. You know I believe in you and can sell the work, and now I have the money to back up my passion.”
“Well, thank you, Bernard. I appreciate your kind words and all the artwork you have sold, but you know I can’t show with you. I’ve been with Brit since the Soup Cans.” Andy Warhol’s Soup Cans were some of his earliest work and brought pop art to the forefront of the art world in 1962. At the time you could buy one for a few hundred dollars, although they didn’t sell well at first. Andy added, “You know I’m very loyal to Brit for his help and believing in my work when no one would pay for it. Why would I want to potentially damage our great relationship? It’s not like I’m sleeping with you and have to give you work, am I?”
“That’s true, Andy. You do have a special relationship with Brit. I wish I could sleep with you, but I’m afraid I like the opposite sex so far. What I can do is make you a lot more money and promote you with big splashy ads in a new trendy area of the city: Chelsea. I’m not even considering asking you to leave Brit. Just allow me to purchase some fresh work from you and here’s what I think you will find interesting.”
Bernard paused, and then made his final pitch: “I will buy all your work at 20% off retail, nothing on consignment. My first purchase will be for $50K including your Cowboys and Indians series which I love and think needs better exposure. My second purchase in three months or less will be for $100K. My third purchase in six months or less will be for $200K. All at 20% off retail. That will make you, at a minimum, an additional $75K in your pocket as well as massive free advertising exposure. And your work will hang in a hip young gallery in up-and-coming Chelsea. I will advertise in two major art magazines each month for a year, half the ads with your choice of artwork to be promoted.”
Warhol was a businessman and he knew this was a sweet deal. Brit’s Fine Art, like almost all galleries, took 50% of the profits and would not purchase the pieces outright. That meant the artist had to wait to get paid and only after the sale, and then usually an additional 30 days before payment. Also the dealer often would have to discount the artwork 10% to get deals done, which meant less money. Bernard was taking a big financial risk and Warhol knew it. Brit could simply discount Andy’s work by 20%, but Bernard couldn’t make any money if he did that. Warhol would only let Brit discount his end by 10% and the other 10% or more would have to come off Brit’s end only, but Brit wouldn’t care, he was still making 40% and would be killing many of Bernard’s deals. Bernard Phillips couldn’t sell for less than 20% off or he would lose money. For Andy, it meant Bernard probably would have to price things above the market, which might help bring all his prices up if he could get the premium for the work.
“Bernard,” Andy decided, “I hope you have a lot of money because I would guess Brit might come after you on price pretty hard and there’s not anything I can do about that. It’s his call. I don’t care if you want to price my pieces above the current market. I will expect you to keep your end of the bargain in regards to the additional purchases or you won’t ever be getting anything from me. Not even a little drawing of a pear, if you get my drift.”
Bernard knew this was a reference to the little drawing Warhol had traded him for some fruit. Also Andy was saying in not so many words, “If you screw me, I’ll screw you and not in the literal sense.”
“Yes, Andy, I fully understand what you are telling me. And I also understand Brit will not be happy. But business is business, and Andy, I mean business. Brit will understand. Really, what choice does he have? He will never want to lose you. I’ve got enough capital. I can outwait him and then you’ll have two strong galleries representing you in New York. With my hip location, we’ll develop new collectors. All parties win, including Brit.”
“OK, then I will put my name on the line for you. Just don’t expect a lot of my early ‘60s canvases. I have to let Brit have most of the good stuff. I will give you one of my Soup Cans that I still have and a Marilyn or two of the less popular colors, but the majority of my best work has to be at Brit’s. He’s going to be mad enough at me as it is. He will agree to let me show with you, but he needs a carrot.”
“I can live with that, Andy. I just need a couple of early works each installment to help with the discounting I will be expecting over at Brit’s.”
“I hope you have a few good clients who will follow you over to the new place while you develop your own clients, and they aren’t worried about price. By the way, what’s the gallery name?”
“The Cutting Edge, and yes, I feel confident my client list will want to buy from me.”
“I like it, a real scary name, with a sharp edge one might say.” As Warhol began to laugh at his little joke, he had no idea how accurate his description truly was.