Fabergé and Gordon Brothers

Article

When renowned jewellers Fabergé sought an inventory valuation and a new finance line it little expected to find both at the same firm. However, Gordon Brothers was especially happy to show this client that sometimes you really can put all your eggs in one basket.

Date October 2017

Featured in Business Money

Chic

When reviewing its ABL options, Fabergé’s debt advisors decided an expert valuation was needed and made Gordon Brothers its first port of call. The firm is the world’s largest asset appraiser and has a global reputation across all asset classes but in this case could claim particular sector expertise because of its shared origins as a jewellery retailer. MD of Jewellery Valuations, Leonard Polivy was delighted to be given the brief. “It’s a thrill to be working with any industry leader, especially one with a heritage that will go on forever,” he said from his Boston office.

Leonard explains that Fabergé’s inventory is unique. Others will occasionally try to copy its product, but there is a level of craftsmanship and elegance that sets Fabergé apart, even from other super-luxury jewellers. To value something so unique requires a thorough level of due diligence. Time must be spent in the showroom as well as the boardroom as sales staff see first-hand what items are selling and who is coming into the stores. Every part of the business is examined and to get the full picture the valuers also talk to buyers, stock controllers and the marketing team.

Gordon Brothers employs former traders, retailers and appraisers and its in-house technical skills give it a leading edge. Externally it works and liaises daily with finance, management and industry professionals around the world to keep abreast of market movements and sales patterns. However, the firm also takes a surprisingly psychological approach to valuations. “You have to get into the mindset of its existing clients and those you might next have to sell to,” says Leonard Polivy. “What is motivating people to pay what they do? If you ever needed to, could you sell discounted stock to the same people without putting them off or to a new demographic less exposed to the brand’s marketing?”

Gordon Brothers has a decisive advantage over appraisal competitors in also having an industry-leading disposal division. It does not have to rely on hypothetical liquidation values because somewhere in the world it is actually disposing of those goods. The firm appraises and disposes of over £45bn of stock annually: an impressive scale that improves accuracy and gives authority to its assessments. Having market-tested, real-time values to hand allows Gordon Brothers to give a more confident inventory appraisal which often unlocks higher asset values for its clients.

By the Dozen

Gordon Brothers was attracted to Fabergé by the brand’s long reach and history. Among the many beautifully-fashioned items it made for the Russian royal family was the iconic series of lavish and ingenious Imperial Easter Eggs. “We have in-depth knowledge of brands and their impact and work with dozens every year,” says Ramez Toubassy, President of Gordon Brothers Brands, “and this is a powerful one which instantly resonates. When you say Fabergé a significant proportion of the population has an emotional response. You can’t build that overnight.”

Shelling Out

Gordon Brothers is more than a valuation and disposals group. The firm provides capital in conjunction with Gordon Brothers Finance Company (GBFC). GBFC is a global specialty finance company that provides debt capital to borrowers across a wide spectrum of industries. Having just appraised it, Gordon Brothers fully understood Fabergé’s inventory and other assets and bid for the finance at a time when volatility in Africa was narrowing the lending field for mining-related businesses.

“We believe in our valuations,” European President, Heinz Weber states unequivocally, “and where necessary we back them with our own money.” He goes on to explain, “We complement rather than compete with traditional ABL lenders and usually sit behind them with second charges, but if there’s a void, we’ll fill it.”

True to this philosophy Gordon Brothers and GBFC now took over the ABL line to Fabergé in full. Its uniquely-structured facility endorsed Fabergé’s asset strength and the accuracy of its valuation of it. The facility also confirmed Gordon Brothers’ credentials in finance and willingness to invest its own capital into clients.

Battery

Gordon Brothers’ relationship with Fabergé allowed it to engage the full battery of its firepower. The firm’s century-old sector expertise in jewellery, backed by knowledge gained from its global disposal business allowed it to assess the inventory and other assets with a very practised eye, supported by real-world pricing. Finally, the firm backed its own appraisal with an unrivalled credit line from its specialist finance division. This left Fabergé, who should know, with the feeling that Gordon Brothers were rather good eggs.