From tsar's eggs to venture capital: who got Fabergé?

Fabergé is being taken over by a new owner - the American company SMG Capital LLC - the latter is owned by Sergey Mosunov, a native of Nizhny Novgorod. The deal should be completed on August 28. Why is Gemfields Group selling a legendary brand for tens of millions of dollars cheaper than it paid when buying it?

Gemfields is a leader among colored gemstone suppliers: the group owns 75% of the operators of the Montepuez ruby deposit in Mozambique and one of the world's largest emerald deposits, Kagem (Zambia).

The company had a single non-mining asset - Fabergé. In December 2024, the company put the brand up for sale. The buyer was found eight months later. Sergey Mosunov's US-based SMG Capital LLS will pay $50 million for Fabergé: $45 million after the deal closes, with the remaining $5 million being quarterly royalty payments.

The deal improved Gemfields' position on the market. Due to the slump in the luxury market and the unrest in Mozambique, which forced a temporary freeze in ruby mining, the company's share price has almost halved over the past year.After the deal became known, two companies raised their target price for the securities in London (there they are traded at 5.75 pence per unit).

Mark Watson-Mitchell, director of SQC Research and Contributing raised the target by a whopping 22% from 5.75p to 7p.

Duncan Hay and Tom Price of Panmure Liberum raised their target price for the group's shares from 14p to 15p on August 12, recommending them for a buy. They believe a share sale would be a favorable decision for the group as it would free up capital to complete the expansion of the Montepuez ruby mine in Mozambique.

Fabergé is one of the most famous brands in the jewelry world, it has existed since 1842. It became world famous thanks to Peter Carl Fabergé, his copy of a Scythian bracelet caught the eye of Emperor Alexander III at the All-Russian Exhibition in 1882. He was impressed. Three years later the company received the status of "Supplier to the Court of His Imperial Majesty" and the first order for an imperial Easter egg. From then on, the royal family ordered Fabergé Easter eggs every year. After the revolution, Fabergé fled and as a result of perturbations, the heirs lost the business and the opportunity to receive the inheritance.

Forbes details how Armand Hammer smuggled jewelry out of Soviet Russia in agreement with the Bolsheviks, flooding Europe with fakes. And in 1931, Hammer's friend Spaniard Samuel Rubin, an exporter of soap and olive oil, founded a new company, Fabergé Inc, which produced colognes and perfumes. It was as a perfume company that Fabergé Inc was bought by Unilever in 1989 for $1.55 billion. According to the company's website, under Unilever, the Fabergé name appeared on many products up to toilet cleaners.

In 2006, Brian Gilbertson, the former head of Sual, acquired the rights to the Fabergé brand from Unilever through a specially created Project Egg Ltd. Vedomosti wrote about his litigation with Russian oligarch Viktor Vekselberg, who invested in the Fabergé egg collection. The company later became part of Gilbertson's Pallinghurs fund. In 2012, Gemfields, which is now run by Brian Gilbertson's son Sean, bought the company. During the time spent at Unilever, the brand has fallen significantly in price: the British valued it at $142 million: they paid in shares, and in fact in 2013 for Fabergé paid $90 million.

Fabergé has collaborated with stars from Zaha Hadid to Ralph Lauren, produced collections with allusions to Mark Chagall's paintings, staged exhibitions at Harrod's and recreated the historical motifs of imperial eggs. All of this worked for Gemfields' image.

By 2024 Fabergé had a developed sales network: six own boutiques (including in London and Dubai), 130 retail distributor-partners worldwide, an online platform - and losses. For 2024, Gemsfield recorded an after-tax loss of $100.8 million - 36 times more than a year earlier ($2.8 million). Annual revenue fell by 19% - from $262 million to $213 million.

Fabergé's history as part of Gemfields has come to an end. Announcing the sale of the brand, Sean Gilbertson, CEO of Gemfields, said the sale marks the "end of an era" for his company.

The proceeds will be used, among other things, to start up a new processing plant at the Montepuez ruby mine in Mozambique and ramp up production at the Kagem emerald mine in Zambia, according to a company press release.

The buyer of Fabergé is the American company SMG Capital LLC, controlled by Sergey Mosunov. A native of Nizhny Novgorod, Mosunov is a serial entrepreneur with interests in the technology sector: he is the co-founder of the biotech startup DNA ML, founder and CEO of the analytical platform for venture capitalists Wale.ai, a partner of the venture capital company The Garage Syndicate. But now on his Linkedin page, his VC & Angel Investor status is in second place, with Fabergé in first place.

Mr. Mosunov writes about his plans for the brand mainly in Telegram. He recently cited the high-end watch market as an example, mentioning that exclusivity is a key asset in the luxury segment, and independent players like Patek Philippe and Richard Mille "confidently hold the highest price level".

"What could Fabergé do, given such difficult market competition?" writes Mosunov, "I think super scrutinize Richard Mille's business model). Richard Mille sells only about 5,000 watches a year, but thanks to its high price point it achieves a turnover of 1.13 billion Swiss francs.

This article was AI-translated and verified by a human editor