Oct. 8 (Bloomberg) -- London’s contemporary-art traders are aiming to defy the recession in their biggest week of the year by offering works including a $9 million Francis Bacon painting.

The Frieze Art Fair previews on Oct. 14, with 165 galleries bidding to win business from billionaire collectors. That’s up from 151 last year. Frieze found new exhibitors as 28 galleries pulled out. Other satellite events have shrunk or closed.

Frieze is still Europe’s biggest fair exclusively devoted to original works by contemporary and living artists. Demand for these works contracted during the financial crisis that followed the collapse of Lehman Brothers Holdings Inc. in September 2008. Volumes of auction sales shrank between 70 percent and 80 percent, and prices of some artists more than halved, said the London-based research company ArtTactic in an e-mail last month.

“It’s still a different world,” Frieze exhibitor Cornelia Grassi, director of the London-based Greengrassi gallery, said in an interview. “There was a marked difference at last year’s fair. It was a wake-up call for everyone.”

London-based dealer Gerard Faggionato will be offering Bacon’s 1988 painting of a male nude, “Study from the Human Body after Muybridge,” with a price of $9 million at the satellite Pavilion of Art & Design London fair. The painting is from the estate of the artist, which Faggionato represents.

“There’s been a change from galleries asking who they want to sell to, to collectors asking who they want to buy from,” Faggionato said in an interview. “People will wake up next week. Everybody’s waiting to see what will happen.”

Regent’s Park

The seventh annual edition of Frieze opens to professionals and VIPs in a 70,000-square-foot temporary structure in Regent’s Park.

“If you’re a primary-market dealer, you depend on fairs,” said Grassi. “Collectors want to see things in context. They can go to a fair and see what’s going on quickly.”

Twenty-nine of the exhibitors will be in a new section, “Frame,” containing single-artist presentations from galleries less than six years old. Established dealers such as Simon Lee of London, Patrick Painter of Santa Monica and Cologne’s Jablonka Galerie have left the fair. Manhattan-based Rivington Arms, which exhibited at Frieze last year, is among several dealerships in London and New York that have closed.

The fair, wholly owned by namesake Frieze magazine’s founders Matthew Slotover and Amanda Sharp, hasn’t given sales figures since 2006, the organizers said on their Web site. For the last two years, the event has attracted more than 60,000 visitors, they said.

Energy Levels

“Last year, energy levels at Frieze were lower than previously,” Todd Levin, director of New York-based advisers, Levin Art Group, said in an interview. “Though business was done, people were methodical, cautious. They were in no rush. I expect the same this year.” His clients were being advised to adopt a wait-and-see attitude, he said.

“In the resale market for established artists, we’re waiting to see if there will be more blood in the streets,” Levin said. “And we’re also waiting for new artists to capture the zeitgeist. We’re not quite there yet.”

With demand and prices lowered, sellers have been reluctant to enter high-value contemporary works in auctions. Sales of “Part I” quality pieces at Sotheby’s, Christie’s International and Phillips de Pury during “Frieze Week” carry a low estimate of 20.8 million pounds ($33.1 million), 81 percent down from 2008.

New York-based fair organizers SCOPE were also a presence in London last October, hosting an art show at Lord’s cricket ground near Regent’s Park. The fair hasn’t returned to London this year.

Discounts Wanted

“Everyone’s taking their time. They don’t reserve works and they ask for discounts,” said Sylvia Kouvali, director of the Istanbul-based gallery Rodeo. She is exhibiting the Cypriot- born artist Haris Epaminonda in the “Frame” section of Frieze. Rodeo’s booth costs 6,500 pounds, she said.

Last October, Rodeo took a 6,000-pound booth at the satellite Zoo Art Fair in the Royal Academy of Arts. Like “Frame,” Zoo was devoted to emerging galleries.

“It was a terrible week,” said Kouvali. “It was right in the middle of the crash in the financial markets. No one wanted to buy art.”

The fair’s space in the Royal Academy has since become the home of Christie’s wholly owned dealership, Haunch of Venison.

London Zoo

The sixth edition of the event, which originally started in London Zoo, has now moved to a disused Victorian-period industrial space in Shoreditch High Street, east London. It is no longer labeled an art fair -- the title is simply “Zoo 2009” -- and contains a higher proportion of non-selling exhibition areas.

The number of commercial galleries taking booths has fallen from 58 to fewer than 20, said director Soraya Rodriguez.

“Dealers are finding it hard to travel,” said Rodriguez. “Most of them are downsizing and becoming more selective about fairs. It was nigh on impossible to get galleries from the U.S. to participate,” she said, even with the cost of booths being reduced by up to 36 percent.

Los Angeles and London dealer CRISP is the only U.S.-based gallery to have booked a booth at the event. Zoo opens to professionals and VIPs on Oct. 15. Last year’s fair attracted 15,000 visitors.

“The days of the art-for-investment mentality have gone,” said Rodriguez. Collectors “are more cautious and they’re buying at a lower price point.”

London’s specialist modern and contemporary design fair in Berkeley Square is another Frieze Week event that has rebranded in the recession. DesignArt London has become the Pavilion of Art & Design London after demand for furniture by designers such as Ron Arad and Zaha Hadid declined during the crisis.

Fewer than half of the 40 exhibitors at this year’s fair, which previews on Oct. 13, are specialist dealers in design. The event has been bolstered by galleries showing modern and contemporary art, such as Faggionato, Galerie Vedovi of Brussels and Van de Weghe Fine Art of New York.

(Scott Reyburn writes about the art market for Bloomberg News. Opinions expressed are his own.)

To contact the writer on the story: Scott Reyburn in London at sreyburn@hotmail.com.

Last Updated: October 7, 2009 19:00 EDT