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When the Going Gets Tough, Some Go Shopping at Museums
January 10, 2002
By CELESTINE BOHLEN
At a time when New York museums were still hurting from the
shocks of September and shoppers were hunkering down for a
national recession, the Metropolitan Museum of Art still
managed to do a brisk business selling $35,000 amethyst
pendants and one-of-a-kind embroidered Indian shawls, at
prices ranging from $2,000 to $6,000.
The success of this kind of high-end merchandise, inspired
by the dazzling opulence of the special exhibition "Jeweled
Arts of India in the Age of the Mughals," offered a small
dash of comfort in what was otherwise a bleak holiday
shopping season in New York's museum stores.
"The jewelry seemed to hit a note that people liked," said
David E. McKinney, the president of the Metropolitan, who
said that sales from the gift shop connected to the Mughal
exhibition were two and a half times higher than
anticipated.
While sales at the Metropolitan's national retail empire,
now numbering 15 stores from Long Island to Los Angeles,
were down about 10 percent for the last six months of 2001
(compared with the same period a year ago), the shops
inside the museum's Fifth Avenue building were down just 9
percent - buoyed largely by the success of the shop for the
Mughal show (which closes on Sunday).
Shopping long ago became an integral part of the museum
experience in the United States. According to a 1999 survey
of 1,800 museums by the American Association of Museums,
revenue from gift shops and publications accounted on
average for 25.5 percent of earned income (general
admissions is the next highest source, at 19.8 percent) and
7.1 percent of gross income, a figure that also includes
philanthropic gifts, sponsorships and government grants.
Usually, the most extravagant shoppers are tourists, and
late last year it was the tourists who were missing from
New York city's museums, causing two - the Solomon R.
Guggenheim and the Whitney Museum of American Art - to lay
off staff members.
The slump in attendance, which began sharply in September,
continued through the holiday season: at the Metropolitan
for instance, attendance last month was still down 25 to 30
percent from a year earlier.
Coming on top of the decline in attendance, the drop in
sales revenues has been a particularly painful blow. "This
is the one area which has been really brutal," Glenn D.
Lowry, director of the Museum of Modern Art said in a
recent interview. "Retail makes most of its money in the
last quarter," Mr. Lowry added. "This came at the worst
time for us." Last year, as Christmas approached, gross
revenues at the Modern's celebrated design store were $3
million below an expected level of $30 million, he said.
"Right now, we are losing money in retail," Mr. Lowry said.
"We will be really lucky if it breaks even."
But as bad as the news was, some museums could take comfort
from the fact that the drop in sales revenues was less
steep than the drop in attendance. In other words, while
fewer people were visiting museums, those who went shopped
- sometimes even a little more than usual.
For the Met's managers, the lessons learned from the Mughal
gift shop, which offered original items specially made by
the heirs to a Jaipur jewelry-makers' dynasty, was that
high prices can be overcome when shoppers feel inspired by
the art. "It was a special event because the exhibition was
a special event," Mr. McKinney said. "It was a one-time
thing, but it may mean we can be more optimistic with what
the market will bear, particularly if it ties in to a
show."
Similarly, at the American Museum of Natural History, the
popularity of the "Pearls" exhibition helped push the gift
shop's sales of pearls well beyond anticipated levels, an
official at the museum said.
At the Brooklyn Museum of Art, sales were up 25 percent
over the same day in December 2000 during the one-day
Members Only annual holiday shopping day. "We were offering
a 20 percent discount, but then we always offer a 20
percent discount," said Sallie Stutz, vice director for
marketing. "I think people just wanted to come and support
their institutions."
At the Whitney Museum of American Art, "store sales were
outpacing admission," said the director, Maxwell Anderson.
"There is a holiday bump every year, partly because we are
on Madison Avenue, which is a spending location."
The American Folk Art Museum also saw its special
hand-crafted items fly off the shelves at the museum's
recently opened new home, on West 53rd Street. "We have to
factor in that it was a new building," said Marie DiManno,
director of museum shops, "but it was phenomenal."
But at the Folk Art Museum's outlet at Lincoln Square,
sales were down, just as they were at most other museums in
the city. And at the Brooklyn Museum, poor attendance at
the "Eternal Egypt" exhibition, brought here from Britain,
lowered anticipated gift-shop sales by 25 percent, Ms.
Stutz said.
Museum stores have an edge over their commercial
competitors because their profits are exempt from business
taxes, provided that the items they sell are in keeping
with the educational mission of their collection. But the
lines between mission and commerce have often blurred, as
museum directors succeed in defining as educational tools
baseballs bearing artists' signatures and packages of pasta
in the shape of works of art. As a result, only a tiny
percentage of museum retail sales are eligible for what the
I.R.S. calls the "unrelated business income tax."
The Metropolitan Museum, which began selling art
reproductions and publications soon after its doors opened
in 1870, has been perfecting the art of retailing ever
since. It now operates shops in SoHo, Rockefeller Center
and La Guardia Airport as well as stores across the country
and several franchise operations abroad.
In 2000 the Metropolitan Museum's gift shops reported gross
sales of $76 million, of which just less than half came
from the shops in the museum, according to recent financial
reports. The net revenue, however, from the entire retail
operation is only about $1 million a year, Mr. McKinney
said. In addition to usual expenses like the cost of the
goods, personnel, distribution and commercial rents, the
Metropolitan Museum also offsets its profits with rent,
utility and security costs charged to the main building's
gift shops.
Eighty-five percent of American museums do not charge their
stores rent, according to a recent survey for the Museum
Store Association in Denver. Mr. McKinney said the Met did
so in order to keep closer track of the performance of the
shops at the Fifth Avenue museum, which can then be
realistically compared with satellite stores in other
locations.
The most recent addition was a store that opened in the
Aladdin Resort and Casino in Las Vegas last June, in the
same city where the Guggenheim opened its latest satellite
museum in October. Like other outlets in tourist meccas,
the Las Vegas store has lagged behind expectations since
Sept. 11.
But while tourist-related dollars were hard to come by,
catalog and Internet sales were generally up, several
museums reported. The Whitney reported a 100 percent
increase in business conducted through its Web site, while
sales from the Metropolitan's Web site were up 40 percent
during the last half of last year.
"People are shopping more from home," Mr. McKinney
said.
http://www.nytimes.com/2002/01/10/arts/design/10MUSE.html?ex=1011660393&ei=1&en=6b030159d6ee4670
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