The Fabergé Inventory Partner Programme (FIPP)
Parties of good standing are invited to apply to Fabergé regarding participation in its programme for Fabergé Inventory Partners (“FIPs”). In short, FIPs pay the cost price of mutually agreed items of jewellery and participate in 50% of the upside. The minimum commitment for a FIP is USD 50,000.
Fabergé is wholly owned by Gemfields Group Ltd, a company listed on the Johannesburg and London (AIM) stock exchanges and which specialises in emeralds and rubies. In addition to 100% of Fabergé, Gemfields also owns 75% of the Kagem emerald mine in Zambia and 75% of the Montepuez ruby mine in Mozambique. Both mines are believed to be the largest of their kind in the world. All gemstones mined by Gemfields are sold in the rough form to third parties at approximately 6 (six) auctions per annum. Gemfields does not directly supply Fabergé with gemstones from its mines. Fabergé purchases gemstones in the market on arms’ length terms from more than 25 suppliers, some of whom are Gemfields auction customers. Fabergé also purchases gemstones from countries where Gemfields has no mines.
The Fabergé Inventory Partner Programme
Under the FIP programme, Fabergé and a FIP enter into a binding commercial agreement whereby:
- Fabergé (which may draw on the expertise and network of its parent company Gemfields) identifies cut-and-polished gemstones of interest and which are owned by third parties;
- Fabergé prepares, at no cost, designs for the mounting and setting of the gemstone(s) into an item of jewellery (whether a ring, necklace, object of art or otherwise);
- Fabergé advises the FIP of the cost of mounting and setting the gemstone(s), including the cost of associated precious metals, accent/shoulder gemstones, etc;
- Should the FIP wish to proceed, the FIP pays the combined cost price to Fabergé and Fabergé in turn purchases the gemstone(s) and completes the mounting and setting on behalf of the FIP;
- The FIP consigns the completed item to Fabergé for a minimum of 3 (three) years and Fabergé offers the item for sale to its clients at typical industry mark-up;
- Upon sale of the item to a Fabergé client, Fabergé pays to the FIP: (i) the original acquisition cost of the gemstone; plus (ii) the mounting and setting costs paid by the FIP to Fabergé; plus (iii) 50% of the profit realised on the sale of the item (with Fabergé retaining the other 50%);
- The FIP retains full legal title to the finished item(s) at all times (until sold to a Fabergé client); and
- During the consignment period, Fabergé bears the risk in the item(s), secures and pays for adequate insurance cover and arranges and pays for all associated logistics and duties involved in marketing the item at such locations as Fabergé determines.
FIPs can also participate in limited edition series and/or objects of art such as one-off Fabergé eggs.
The advantages to the Fabergé Inventory Partner include:
- No-cost access to the market knowledge, expertise, networks, gemmologists and designers at Fabergé and Gemfields;
- The ability to allocate capital to hard assets in the form of carefully selected gemstones and items of jewellery with a trusted partner who knows the industry well and enjoys multiple views of gemstone pricing;
- The acquisition of gemstones and items of jewellery at cost / trade prices with 50% participation in the upside when sold by Fabergé;
- Retention of outright ownership and legal title throughout; and
- In the unlikely event that the item remains unsold at the end of the consignment period and is returned to the FIP, the FIP will have paid only the original cost/trade price for their Fabergé item.
The principal advantage to Fabergé lies in having selected items of higher-value inventory financed by third parties without the need to tie up its capital.
Enquiries may be directed to Antony Lindsay, Managing Director of Fabergé via the Gemfields Group Ltd contact form.