Gemfields courts luxury market through Fabergé

Gemfields (GEM), an Aim-traded producer of ethically-sourced coloured gemstones, has made a decisive move into the upper tier of the luxury goods market through a proposed $142m (£89m) acquisition of Fabergé - the company that gained worldwide repute through the patronage of Russia's Romanov dynasty.

The deal is to be satisfied by the issue of up to 214m new shares representing approximately 39.6 per cent of the enlarged capital of the group. Fabergé is currently owned by Pallinghurst Resources, a mining investment company, which will retain a 49.3 per cent stake upon completion.

Fabergé sells its jewellery through high-end retail outlets in London, New York, Geneva and Hong Kong. Theoretically, the Fabergé deal should allow Gemfields to maximise returns on its coloured gemstones through a dedicated 'value added' element. Presumably, less wholesale, more retail.

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