It’s been several weeks since I’ve updated Reddot readers about what we are seeing with the art market during the current situation. This is not because there hasn’t been news, but because we’ve been very busy. I wanted to give you a quick update in several areas relevant to the art market and what we’re experiencing at Xanadu.
Several weeks ago, I wrote about the frustrations involved in applying for the Small Business Administration’s PPP loan. We ended up putting together applications through several different financial institutions (none of them our bank). It turned out that Cross River, the lender recommended by Gusto, our payroll processing company, was able to process our application and get the loan approved by the SBA.
We only found out the loan had been approved after the first round of funding had been exhausted. Fortunately, Cross River had processed the paperwork and received approval prior to the funds running out. We received funding just a little over a week ago.
The loan is forgivable if certain criteria are met, but there is a fair amount of complexity surrounding the forgiveness process. I’ll have updates as we work through that process.
While it certainly wasn’t a simple or smooth process, the funds are definitely a lifeline to us, our employees, and to many other businesses.
Congress has since approved a second round of funding, and I remind you that if you can document income from your art business, you may qualify to receive emergency relief funding through the program. It would definitely be worth talking to your bank to see if you qualify.
Since we applied, a number of financial institutions have announced that they can process the applications. If your bank can’t help, it may be worth exploring other options. I’ve seen announcements from squareup.com, PayPal, and Cross River regarding PPP application processing.
While our gallery remained closed through the entire month of April, we were able to continue to make sales thanks to our increased social media and email marketing efforts. Many thanks are due to Xanadu staff for their diligence in putting together emails and social media posts, and for their follow-up with customers.
Our sales for April 2020 were down by about 53% when compared to April 2019. A breathtaking decline, to be sure, but I consider the sales we made during the month to be a huge victory when considering the state of the world. The sales are a testament to the importance of cultivating an online relationship with our clients, to having the ability to promote our art online and through social media, and the infrastructure to process the sales through our website.
Not surprisingly, April was a record month for online sales. We saw purchase across a broad range of price points. I wish that I could report that we generated sales for all of the artists we represent, but unfortunately we weren’t. It was deeply gratifying to send out payments to the artist for whom we were able to generate sales, and we will continue our marketing efforts in the hopes that we can help support all of our artists through this difficult time.
We will continue our email and social media marketing, and our May/June Art Catalogue is out digitally and the physical issue will begin hitting our clients’ mailboxes next week.
Arizona Governor Doug Ducey announced last week that retail businesses like ours would be able to reopen in phases beginning this week. Retail businesses of all sizes would be able to open for curbside pickup on Monday, May 4th, and for limited retail engagement beginning Friday, May 8th.
Our business doesn’t lend itself to curbside pickup; we are shipping all of our orders, including those made by local clients. We are eagerly looking forward to being back open this weekend, however, even if there are certain restrictions in place. It remains to be seen how and when our clients will begin venturing out into public, and the health and safety of our clients and staff remains our top priority.
Keep an eye out for updates next week as we open back up, and as we prepare to open our Pinetop, AZ gallery for the summer season.
What Are You Experiencing?
Have you applied for the PPP loan? How were your sales during the month of April? Are the galleries that represent you and other retailers in your area beginning to open back up? Share your experiences and thoughts in the comments below.