Theo Fennell and Gordon Brothers


When leading London jewellers Theo Fennell planned a restructure under new owners it looked to Gordon Brothers to provide a 24-carat service. 

Date October 2017

Featured in Business Money

A close working relationship developed and the retailer relied on Gordon Brothers to overcome inevitable restructure challenges by deploying the full breadth of its valuation, investment and disposal offering.

Matching Pair

Theo Fennell first approached Gordon Brothers with a change of ownership imminent and a new credit facility required. The priority was an asset valuation that would carry real weight in both the trade and the ABL communities. “Gordon Brothers goes back over a hundred years,” explains MD Gary Quaife. “In that time, there are not many assets we haven’t valued. But given that the business began as a jewellery retailer we were a natural fit for Theo.”

“Jewellery is in our DNA,” agrees Leonard Polivy, who heads up jewellery valuation and has over 30 years of global inventory experience behind him. With luxury jewellery, the underlying assets are unique, sometimes bespoke and of course highly concentrated in value. But gold is not all that glitters. Beyond stock, Gordon Brothers assesses every aspect of a business including brand, client base, systems, processes and security.

To support its very human input Gordon Brothers monitors worldwide sales and auction prices across all asset classes through its own renowned disposals division and other sales channels. This creates a current and extensive database for highly authoritative valuations. Put together, the long-standing expertise at a personal and company level and the global information platform will often enable Gordon Brothers to perceive value where others cannot.

Silver Backing

The valuation process marked the beginning of their relationship. An ABL line was needed for Theo Fennell and Gordon Brothers would be called on to demonstrate its finance credentials. US bank PNC won the mandate for the primary lending and was comfortable with Gordon Brothers’ assessment of Theo Fennell and the value over and above the stock that it had identified.

PNC offered a 3-year, £5.5m inventory facility and turned to Gordon Brothers to show faith in its valuation by supporting the credit line with its own funds of £1.2m. “We fill the gap between their appetite levels and our clients’ actual needs, complementing traditional ABL lenders and standing behind our valuations” says Heinz Weber, European President. The firm provides capital in conjunction with Gordon Brothers Finance Company, a middle market 1st and 2nd lien lender working with senior debt ABLs internationally.

Safety Clasp

The combined facility allowed Theo Fennell to trade successfully whilst it implemented several changes to its business model. However, the financial burden of certain fixed cost weighted heavily upon the company and the high-profile jeweller called in BDO for advice, eventually opting to appoint them as administrators.

Gordon Brothers had the resources and sector experience to take the long view and acted as a stabilising force in those difficult times by working closely with the company’s board, main lender PNC and BDO to arrive at a solution for all parties involved, especially the company and its employees.

The first step Gordon Brothers took was to protect the brand and the value in the inventory by supporting its valuation even more robustly and settling the 1st lien liability to PNC. It was confident in doing so because it had regularly revisited its valuation and worked closely with key members of staff in sales, stock control and senior management as well as Theo Fennell himself. As Leonard Polivy points out: “A proper appraisal allows you to understand a company thoroughly and gives you a competitive advantage if you need to take over.”

Polished Sales

Gordon Brothers worked hand in hand with BDO and management to preserve and enhance the value of the inventory as well as client confidence. In a calm and controlled manner, the firm used its disposal knowledge to fully support trading whilst the process of identifying the right buyer progressed. This approach was critical to the outcome. In the end Enact, the SME investor managed by Endless LLP, backed the management buyout by Theo Fennell of his eponymous jewellery business.

Gordon Brothers’ expertise in the jewellery sector allowed Theo Fennell the ability to get the right financing for a transitionary period so the company could begin its journey under new ownership. The collateral valuation of the inventory was key in that process, and by further supporting the capital structure it gave all parties the comfort they needed. In more challenging times it continued to support the business, using its knowledge to increase business activity while supporting the sale process. Gordon Brothers achieved a successful outcome for Theo Fennell by deploying its full asset valuation, asset finance and asset disposal offering throughout their relationship.

Theo Fennell continues to thrive under its new owners, delighting a growing clientele with its innovative designs and giving London even more of the sparkle that the world so enjoys.