Art blossoms out despite bleak picture: In the second of our series on creative businesses, Angela Flowers talks to Richard Lander

Nobody could pretend that these have been anything other than terrible times for art galleries. The large buyers have gone into hibernation and there is an endless list of galleries that have gone bust.

We have suffered as well - we made substantial losses last year against a small profit before tax in 1991 - but we've bucked the trend, expanding with our new space, Flowers East, at London Fields, which opened last year. We've also been helped by the prices of our paintings - you can pay up to pounds 50,000 but you can also buy many in the pounds 600- pounds 700 price range. I also think we have some pretty good artists.

We operate what can best be called a stable of artists. There are 28 of them for exhibit solely through us. They're not tied to us through a written contract but through a verbal deal - we seem to develop the best sales and the best relationships when an artist has complete confidence in us. They know we'd get pretty upset if they showed elsewhere but, very rarely, we have been known to turn a blind eye to the odd misdemeanour. We do also show artists from outside the stable from time to time, provided they don't have ties with another gallery. But we don't do that more than once every six or seven months - our own artists need a show here every two years or so to keep them in the public eye.

The basis of our financial relationship with the artists is simple enough. We take 50 per cent of the sale price, they take the other half. We add on (and pass on) VAT and the artist pays for the framing, although we may help out with an advance.

We also offer retainers to some of our best artists; we used to pay more retainers but the recession has meant that we pay only a few now. Like most galleries we give a discount to museums, which is shared between us and the artists.

There are some frighteningly high fixed costs that have to be paid for before the first painting is sold. Rent and rates have risen dramatically since we started the business in 1970 and have probably been the main cause of many other galleries going out of business. We also have to budget for three or four catalogues a year at about pounds 12,000 each.

Like many other businesses, we cannot make money on all our 'lines' all of the time. On any given exhibition we need to sell at least half of the paintings on display to break even and to sell that many is most unusual. What it boils down to is that our best- selling artists support the others. Our biggest seller is Peter Howson - who has just returned from the warfront in Bosnia - followed by Patrick Hughes, who I opened with back in 1970 and who has been faithful to the gallery for over 23 years.

But we are more than just an exhibition gallery. We have worked hard at diversifying into other sources of income. We saw a demand for prints, both of our artists and of others, and we now sell them in the Graphics Gallery and through a print of the month club. We have also extended our range of clients by exhibiting at international art fairs. They are extremely time-consuming to set up and organise and sometimes we barely break even. But they are absolutely necessary, from a PR and marketing point of view.

Another source of expansion has been the corporate art market - companies buying paintings for their offices. Despite the recession it has improved in recent years as companies have built up their collections, and has helped to take up some of the falling demand among individual collectors; though we've found individuals coming back quite strongly this year.

Why have we survived where others have failed? I think partly because we have placed a strong emphasis on running the gallery as a business. We have a stockbroker, an accountant and two bankers - one of them Sir Kit McMahon - on the board.

We have also taken advantage of the BES scheme to allow us to expand with cheap money - we raised pounds 500,000 in 1990 which was used to get Flowers East going and are currently raising another pounds 750,000. Investors are warned that they will not get any dividends during the five years of the BES investment. But they can see from our prospectus that we are expanding rapidly, and, recession aside, working profitably.

(Photographs omitted)

Start your day with The Independent, sign up for daily news emails
News
people
Arts and Entertainment
Attenborough with the primates
tvWhy BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Sport
The RBS Six Nations trophy at the Aviva Stadium ahead of Ireland vs England
rugby
News
Campbell: ‘Sometimes you have to be economical with the truth’
newsFormer spin doctor says MPs should study tactics of leading sports figures like José Mourinho
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003
Barbara Woodward: Britain's first female ambassador to China intends to forge strong links with the growing economic superpower

Our woman in Beijing builds a new relationship

Britain's first female ambassador to China intends to forge strong links with growing economic power
Courage is rare. True humility is even rarer. But the only British soldier to be awarded the Victoria Cross in Afghanistan has both

Courage is rare. True humility is even rarer

Beware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Alexander McQueen: The catwalk was a stage for the designer's astonishing and troubling vision

Alexander McQueen's astonishing vision

Ahead of a major retrospective, Alexander Fury talks to the collaborators who helped create the late designer's notorious spectacle
New BBC series savours half a century of food in Britain, from Vesta curries to nouvelle cuisine

Dinner through the decades

A new BBC series challenged Brandon Robshaw and his family to eat their way from the 1950s to the 1990s
Philippa Perry interview: The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course

Philippa Perry interview

The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course
Bill Granger recipes: Our chef recreates the exoticism of the Indonesian stir-fry

Bill Granger's Indonesian stir-fry recipes

Our chef was inspired by the south-east Asian cuisine he encountered as a teenager
Chelsea vs Tottenham: Harry Kane was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope

Harry Kane interview

The striker was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope
The Last Word: For the good of the game: why on earth don’t we leave Fifa?

Michael Calvin's Last Word

For the good of the game: why on earth don’t we leave Fifa?
HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?