April 8 (Bloomberg) -- Merlin Carpenter is in action with a bucket of black paint.

About 150 art collectors and students watch and applaud in Simon Lee’s gallery in Mayfair, London, as the British artist, 41, roughly daubs 7-foot-high blank white canvasses. It takes him 10 minutes to paint all seven with anarchic slogans such as “BANKS ARE BAD” and “DESTROY NEOLIBERALS.” Each of the works is then offered for sale for 20,000 pounds ($29,500). Within hours, one painted with the word “Kunst” (“Art”) is a confirmed sale to a U.K. collector and three more are reserved.

Carpenter’s is one of a crop of shows featuring affordable works by younger names that London’s contemporary-art galleries are hoping will sustain them through the worst economic slump since the Great Depression. Other dealers have succumbed as sales dry up. Allsopp Contemporary, which represents U.K. sculptor Alexander Hoda, has closed an exhibition space. Yvon Lambert, who runs galleries in Paris and New York, pulled out of Hoxton Square in March after just six months in the U.K. capital.

“Art has always been a commodity,” says the slender, long-haired Carpenter in an interview. “The boom in the art market has run parallel with the banking boom. The project has always been a commentary on the art market.”

Carpenter’s “Intrinsic Value,” which runs at the Berkeley Street gallery until April 25, marks the fifth time since 2007 in which he has created an exhibition during the bustle of the opening party. The London-based painter was formerly an assistant of the German artist Martin Kippenberger.

‘Young Blood’

“The hunt is on for young blood,” says Serge Telandro, French-born director of Eleven Howland Ltd., which has joined new galleries opening in the Fitzrovia district of central London. “Dealers know that if artists have been pushed hard for the last three or four years, they can’t sell them any more.”

Telandro is showing minimalist sculptures and paintings by Robert Dowling, 29, who graduated last year from the Royal College of Art. London collector Charles Saatchi was a buyer of Dowling’s work at the RCA graduation show, says Telandro.

Five pieces have so far been sold from the exhibition, where prices ranged from 3,000 pounds to 14,000 pounds, he says.

Eleven Howland Ltd. opened in February in a space previously occupied by contemporary-art dealer Alexandre Pollazzon, who closed in December.

Though North Kensington dealership Allsopp has closed a gallery, founder Henry Allsopp will continue as a private dealer, former director Nicholas Aikens says in an interview. Allsopp did not immediately respond to calls to his cellphone.

Royal Academy

Among other new openings, Haunch of Venison, the wholly owned dealing subsidiary of auction house Christie’s International, opened its new two-story 21,500-square-foot exhibition space in the Burlington Gardens wing of the Royal Academy of Arts on March 12.

Josh Lilley Fine Art will be opening in Riding House Street, Fitzrovia, on May 14. Lilley, 28, sold all seven of the surreal portraits by Vicky Wright he took to last month’s Volta art fair in New York.

They were priced at 2,500 pounds to 4,000 pounds. Lancashire-born Wright, 39, will be among 10 young U.K. painters featured in Lilley’s inaugural group show, “Daily Miracles,” at his London gallery. No work will be priced at more than 15,000 pounds.

“If you price at this level there’s a bigger pot of collectors to spend that kind of money,” says Lilley in an interview. “And there’s always the dream that you might be backing someone who might turn out to be a winner. It’s the galleries with the bigger expenses and bigger price-points that are feeling the pinch at the moment.

Discounts Requested

‘‘I’m not making a lot of money, discounts are being asked for, but you’ve got to keep going. It’s about the quality of the art now.”

Milan dealer Massimo De Carlo is scheduled to open a gallery in Dover Street, Mayfair, in December. In the meantime, beginning on April 30, De Carlo will be holding his first London show in a smaller space in nearby Heddon Street, devoted to the American painter Rob Pruitt.

“I’m surprised there haven’t been more gallery closures,” says Lee, the Mayfair gallery owner. “People are still buying. The market is so much bigger than it was in the early 1990s during the last art-market recession.”

Banksy Dealer

Street art gallery Lazarides, the worldwide primary dealer for British artist Banksy, has converted its original Greek Street premises into a shop selling limited-edition prints, posters, books and affordable original works. Prices at the refurbished Soho venue, which opened on April 3, range from 20 pounds up to 2,500 pounds, says Adam Waymouth, the shop manager.

Lazarides will be opening a new gallery for group and solo shows of artists in Rathbone Place near Oxford Street in May, says Waymouth. The company’s print room and exhibition space in Charing Cross Road have closed, he says.

Meanwhile, back at the Simon Lee gallery, the artist is watched by Samantha Roddick, founder of the erotica emporium Coco de Mer, and Fenria, an excitable Finnish Lapphund. Guests disperse after a retro buffet of cheese on sticks and prawns with Marie Rose sauce. After the party, a group of anarchists attempt to attack the gallery.

“Fortunately the police arrived promptly,” Lee says.

The officers are surprised to see the recently painted works with titles such as “STOP ART.”

“They did have a double-take when they looked at the property they’d been called to protect,” Lee says.

(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: April 7, 2009 19:00 EDT