Gemfields announced on Monday that it had signed off on the sale of Fabergé, one of its most iconic luxury brands.
The deal will see Gemfields disposing of Fabergé for $50m to US tech entrepreneur and venture capitalist Sergei Mosunov through his wholly owned investment firm SMG Capital.
It marks the end of Gemfields' nearly 13-year ownership of Fabergé, which gained worldwide acclaim for crafting elaborate Easter eggs for Russian tsars in the 19th century.
The sale, which concludes a strategic review dating back to December, reflects the toll that tough trading conditions have taken on the precious gemstone miner’s balance sheet over the past year.
Since October, the group has faced significant operational challenges stemming from post-election protests in Mozambique and heightened competition in Zambia.
A rising debt burden and pressure on profit margins have seen the miner resort to sweeping cost-cutting measures, including the suspension of operations at its Zambian emerald mine earlier this year.
In a statement on Monday, Gemfields said it was now a “more streamlined and focused investment proposition with a strengthened balance sheet” following the disposal.
It said the proceeds would be used as working capital to expand operations at the group’s Kagem mine in Zambia and to help bring a newly constructed second processing plant at its Montepuez Ruby Mine (MRM) in Mozambique online.
The second processing plant, the construction of which was delayed by an attack by insurgents towards the end of last year, is expected to triple the operation’s processing rate, significantly boosting ruby production and revenue.
“Today’s sale marks the end of an era for us. Fabergé has played a key role in raising the profile of the coloured gemstones mined by Gemfields and we will certainly miss its marketing leverage and star power,” Gemfields CEO Sean Gilbertson said.
“Brands as iconic and beautiful as Fabergé do not change hands very often and we wish the team and Mr Mosunov every success as they perpetuate the unrivalled legacy of Fabergé,” he said.
Mosunov said the outfit would continue to focus on jewellery, accessories and timepieces.
Last year, Gemfields reported a headline loss per share of 39.1c, widening from 16c a year ago. The pressure on earnings also saw the group falling deeper in debt, with net debt having risen to $80.5m in December.
As profitability pressures dampen investor sentiment, shares in the group have given up more than 45% in the past year, causing Gemfields to shed R2bn in value.
Some encouragement came in February, when the Zambian government suspended a 15% levy on gemstone exports, lifting Gemfields’ outlook as its Kagem mine was allowed to resume exports.
The Kagem mine accounts for about 25% of global emerald production. In 2024, the mine produced about 10-million carats of emeralds alongside 30-million carats of beryl — one of the most popular and expensive gemstones.
In recent months, the group has reported increasing demand and improved sentiment after selling $23.6m worth of rubies and emeralds at its latest auctions.
In June, Gemfields’ MD of product and sales said that the group’s latest results marked a notable improvement on the disappointing commercial-quality auction held in September 2024.
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