South African miner aims to revive Faberge
Brian Gilbertson, of Pallinghurst Resources, sees bright future for faded brand
The name Fabergé is one of the world's oldest and most recognisable.
So much so that when the BBC’s Antiques Roadshow programme recently said that they had found a Fabergé brooch worth up to £1 million (Dh4.7m), it made headlines around the world.
The show's executive producer Simon Shaw told The Daily Mail it was "one of the most significant jewellery finds in 40 years of Antiques Roadshow history".
While it retained its allure for the public, the Fabergé brand itself had struggled to live up to the rarified heights it achieved as the preferred jewellers to the royal family of pre-revolutionary Russia.
The House of Fabergé was renowned as the jeweller to the Tsars, crafting fine artwork out of gold, diamonds and more. Founded in 1842, it was raised to royal patronage under Peter Carl Fabergé, a master of his craft. Fabergé, most especially, was known for the delicate jewelled Easter Eggs created yearly for the royal family.
Like many wealthy elite, the Fabergé clan fled into exile after the Bolshevik revolution of 1917. What followed was a schizophrenic emergence of several Fabergé workshops – in Paris, Leningrad and New York.
In a kind of "pass the parcel" the name changed ownership over the decades before landing ignominiously in the hands of Unilever, a global consumer goods company.
"They used the name on roll-on deodorants," says Brian Gilbertson, the founder and chairman of Pallinghurst Resources, a South African investment company. Pallinghurst acquired the brand from Unilever for US$38m in 2007. The name Fabergé is now housed in a separate corporate entity, Gemfields, owned by Pallinghurst.
Given that Unilever originally forked out $1.55 billion for Fabergé, the bargain-basement price at which Pallinghurst acquired the brand shows just how far its lustre had faded by that time.
So, one may ask, can an obscure mining company do any better than a multinational juggernaut?
Mr Gilbertson believes so. Gemfields is not just a miner - it produces much of the world's emeralds, amethysts and rubies from mines in Zambia and Mozambique.
"The old way of selling gems was slow - row upon row of stones were put on display for buyers." Jewellers had to scratch through mixed batches of stones, a time consuming process. "So we now hold regular auctions where buyers can bid on pre-sorted lots," Mr Gilbertson says.
These are held three or four times a year around the world - but mostly in sunny locales such as Zambia, where the gems' sparkle is at its finest.
"Buyers are typically a father and son – they spend days or even weeks pouring over each stone in a lot, then put in a bid," Mr Gilbertson says. Jewellery studios tend to be family businesses, with fathers passing skills on to sons. Part of the process is selecting jewels for manufacturing, which usually means going from dealer to dealer to find the right stones. Gemfields wants jewellers to come directly to them, bypassing middlemen.
Before each auction Gemfields products are washed, sorted and graded. The rough stones are graded not only into size and quality, but also into the different categories for specific cutting requirements.
The firm says it has the world's most comprehensive grading system, which allows jewellers to plan ahead and, overall, leads to an increase in demand.
All production so far is in Southern Africa. The Kagem mine in Zambia is the world’s single largest producer of emeralds and accounts for approximately 20 per cent of global production. Gemfields also owns a 50 per cent stake in the Kariba mine in southern Zambia, the world’s largest amethyst mine.
In addition Gemfields produces around 70 per cent of the world ruby supply, from the Monepuez deposit in north-east of Mozambique.
"The idea is to recreate for coloured gemstones what de Beers did for diamonds," says Mr Gilbertson. De Beers essentially created the diamond market from the ground up, artificially controlling demand, and backed a superbly successful advertising campaign with slogans such as "a diamond is forever".
Today, de Beers still owns production mines and is one of the largest suppliers of diamonds in the world. It also owns a high-street retail store chain bearing its name and employs craft jewellers to make bespoke pieces for well-heeled clients. "The great thing about de Beers is they took up the whole production chain," Mr Gilbertson says.
This, then, is the strategy behind acquiring the Fabergé name. Already Gemfields has four stand-alone Fabergé stores and about a dozen outlets around the world, including the UAE. In the Emirates, Fabergé has a close relationship with Damas and its creations are available in Marina Mall in Abu Dhabi and Wafi City in Dubai.
Mr Gilbertson's career achievements include the creation of BHP Billiton, the Anglo-Australian mining powerhouse that is one of the world's largest commodities producers. Through a series of corporate sidesteps, he took the company he initially headed, the gold producer Gencor, and eventually engineered in the late 1990s the formation of what from 2001 to this year was known as BHP Billiton. In May, BHP dropped "Billiton" from its name.
Not long after he was ousted in a BHP Billiton boardroom battle, Mr Gilbertson turned his attention to other commodities, until he cast his eye on gemstones.
Eventually, he hopes Fabergé will once again be a desired high-end consumer brand and, for jewellers themselves, that Gemfields will be the industry standard for stones.
"Gemfields has already accomplished quite a bit in this regard," he says, pointing out that once that is fully achieved, its standing will probably be secure.
As he adds: "Once you've watched a colour TV, you don't go back to black and white."
Updated: July 27, 2017 10:41 AM