Gilbertson's golden egg
Names can mean a great deal. The name Fabergé, for instance, connotes ultimate luxury, craftsmanship and great beauty—eliciting images of the Russian tsars and their lust for Peter Carl Fabergé‘s sumptuous jewelled eggs.
The name Gilbertson, on the other hand, specifically Brian Gilbertson, erstwhile chief executive of mining conglomerate BHP Billiton, comes packed with associations of heavy industry and the cut-throat world of international business.
But the two names are from now on going to be associated with each other after Gilbertson’s private equity vehicle, Pallinghurst, set up Fabergé Ltd and bought the Fabergé brand, with all its associated trading rights, from multi-national Unilever last year.
Recently Pallinghurst Resources, managed by Pallinghurst, made its much-anticipated debut on the Johannesburg Stock Exchange. Although Pallinghurst Resources has prospects in manganese and platinum, as well as interests in emerald mining, this is to be expected given Gilbertson’s background.
The link to Fabergé and luxury goods is more incongruous. But Gilbertson’s interest in Fabergé, it seems, goes back a while.
“I first thought of Fabergé as a potentially valuable name when I was still an executive of BHP Billiton,” Gilbertson told the Mail & Guardian from London.
He says that during that time the diamond-producing mining giant was toying with a way to sell the precious stones. “It was considering various alternatives, one of which was to sell them [the diamonds] to De Beers. The other was to brand the diamonds themselves,” says Gilbertson.
One option, he says, was to brand the diamonds with the name “Ekati”, after a mine in Canada where the gems are produced. “Have you ever heard of Ekati?” Gilbertson asks. When my answer is a straightforward no, Gilbertson is quick to point out that I have “no doubt” heard of De Beers.
Brand recognition, it seems, played a huge part in Gilbertson’s desire for Fabergé. “At some stage, I wondered down to the diamond part of the business and after making some enquiries I realised that one name that people would recognise is Fabergé,” he says.
Gilbertson explains that he did further research only to discover that the ubiquitous Unilever already owned the rights to the Fabergé name. Because of what he describes as “other priorities” at the time, Gilbertson did not pursue the matter. “But it always sat at the back of my mind as a potentially valuable brand,” he says.
Through Pallinghurst, Fabergé Ltd was established in 2006 for the express purposes of buying back the Fabergé brand from Unilever.
Another significant part of the process has been to reunite the Fabergé brand with the last remaining Fabergé heirs, Peter Carl Fabergé‘s great granddaughter, Tatiana, and his great-great granddaughter, Sarah. They form the founding members of the Fabergé Heritage council as advisers to the unified Fabergé brand. The family lost the rights to the Fabergé name in 1951 after a protracted legal battle with an American corporation. Following a series of sales, Fabergé ended up in the hands of Unilever in 1989, for $1,15-billion. The name has been used to sell cosmetics and aftershave, but will now begin refocusing on the luxury jewellery items that it is historically associated with.
To “divorce” Fabergé from “the family DNA” would be a disservice to the brand, says Gilbertson. The “love and knowledge” that the remaining family have for the Fabergé brand is to “create something much greater” than the dislocated, empty label it has been, he says. Pallinghurst also owns emerald mining company Gemfields, the head of which is Gilbertson’s son, Shaun. Gemfields ultimately aims to become the world leader in the production of green gem stones.
Analysts have speculated that Gilbertson looks to establish a foothold at every level of the value chain in the gemstone trade, from raw production to finished product through Fabergé. But Gilbertson says that the group’s chief aim is to become an established producer of purely ethically sourced gemstones. “For much of my career I have put in place health and safety policies where a mine is run on an ethical basis,” he says. “To do this you need to own the operation.”
Gilbertson points to the trade in diamonds as well as rubies, where the gems’ associations with exploitation and oppressive regimes have left Western buyers with a bad taste in their mouths. According to Gilbertson, fabled Burmese rubies fetch higher prices on auction than some of the world’s loveliest diamonds.
“But you can’t buy them because of the Western markets’ perceptions of how the Burmese government treats its people.” The ruling military junta in Burma, or Myanmar, is reported to receive vast amounts of funding through the international trade in the gems. “You won’t find that with our emeralds,” he says.
The alignment of his business interests through the unlikely pairing of commodities and luxury goods is something Gilbertson is fairly confident about. He is unfazed by market movement, preferring to take a long-term view of things. The end of the market that will be carrying the Fabergé brand is “fairly resilient” to changes in the economic outlook and “not particularly concerned with market fluctuation”, he says.
Furthermore, he says, his years in mining have left him relatively unconcerned by market developments over a quarter or two. “As long as countries such as India, China and Brazil grow in the decades ahead, they will need resources, the commodities that come out of the ground, and these don’t come cheap anymore,” he says.
With his business placed to take advantage of that growth “that’s a very good position to be in”, he says.