London’s Design Museum Rescued By Loan

The Design Museum, located in the Royal Borough of Kensington and Chelsea, has received a £3 million financial package in an effort to secure its long term future. The institution, which was named as the European Museum of the Year in 2018, has been in considerable financial difficulty in recent times. It published figures at the end of the last reporting year that indicated it was operating with a seven-figure loss.

Founded in 1989 by Sir Terrence Conran, a British designer and restaurateur, the Design Museum relocated from its former site close to Tower Bridge in 2016 following a huge £17.5 million donation by the founder when it took up a new site previously occupied by the Commonwealth Institute. Despite this, however, the museum has continued to raise insufficient funds from its ticket sales to generate an operational profit.

In a report that the Design Museum published at the end of March 2019, it became clear that the institution was looking to come up with a new plan for its finances. With an operational deficit of £1.2 million in the financial year 2018 to 2019, the museum’s directors certainly needed to find a new way to safeguard its future. At that time, the museum said that the deficit it was making was “unsustainable in the medium term.” It went on to report that it has launched what it called a strategic review of donations and all other forms of philanthropy. In addition, the new financial initiative outlined in the report included an updated business plan. The details of this plan took in every aspect of the museum’s daily operations so that it would be able to return to operational profitability within the course of a four year period.

Dwindling Visitor Numbers

Crucially, the plan to put the museum back onto a sound financial footing dealt with a new strategy for its many display exhibitions. According to the report, this would mean that the museum would shift its approach to delve into “the broadest range of design topics.” In a widening framework that was basically designed to attract a wider group of visitors, its exhibitions would take in anything from architecture to fashion, as well as topics like graphic design, digital design and automotive design.

The root and branch review that Design Museum came up with prior to its new business plan laid bare just how much would be needed to turn the situation around. It noted that paying visitors to the institution had gone down from approximately 228,500 for the period from November 2016 to the following year. In the corresponding twelve months from 2018 to 2019, visitor numbers dropped to just a little over 183,000.

Although the museum recognised that several institutions in the capital faced similar drops in their visitor numbers, the report attributed its own losses to running more programmes with specialist focusses rather than catering for general visitors. In addition, the report pointed out that the museum was no longer new and that fact alone accounted for some dwindling interest.

The Rescue Package

With an operational deficit, the Design Museum’s board elected to take out a multi-million pound loan to cover its current short-term costs. This was issued from the Conran Foundation which also makes charitable donations to the museum. The financial package is expected to run until the end of June in 202., meaning that the museum only has a limited time to turn its financial situation around or it will not be able to afford to pay back the loan. According to the terms of the loan, the first repayment will be due as soon as June 2021. The museum has already indicated that it plans to generate more income by reorganising its own financial reserves and through a raft of fundraising activities.

According to the museum’s latest accounts, the institution has hired two consultancies to help it. These have taken the lead on strategic reviews that were designed to address the museum’s philanthropic activities. In addition, it is understood that they have been addressing the future business plan of the institution with the central focus being placed on achieving operational profitability within the period of the loan’s repayment schedule. In addition, the Design Museum has looked to other sources of funding. For example, it has stepped up its lobbying activities in order to ask the government for greater statutory funding. The published accounts indicate that the museum is now spending similar sums on lobbying as other big British museums.

Signs of Improvement?

Reports have circulated following the announcement of the Conran Foundation’s rescue package that the situation may be improving. According to some in the UK press, during the first six months of the current reporting period from April 2019, the number of tickets sold for the Design Museum went up to more than 206,500. This meant that around 20,000 more people paid to go to the museum than had done so in the whole of the previous financial year.

Among the reasons for this turn around in the museum’s fortunes was that it staged one of its most successful temporary exhibitions in its history. This was a Stanley Kubrick retrospective, which focussed on the films and marketing material of the famous film director. This exhibition alone accounted for 169,000 visitors. In addition, there was another show called ‘Moving to Mars’ that opened later in the year. It was completely sold-out throughout its first weekend.

A spokesperson for the Design Museum said that all of the new work constituted “an exciting endorsement” of the institution and its potential. The museum wants to find new audiences for design. “Our vision is to establish a world where everyone values design,” the spokesperson said. “Developing new audiences… has always been a key focus for us.”

The new regime at the Design Museum was underlined by two of its co-directors, Deyan Sudjic and Alice Black, stepping down from their roles in October after many years in them. Tim Marlow, previously of the Royal Academy in London, has been appointed as the museum’s new chief executive director.