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May 27, 2008

Can the Faberge Brand Name Recapture Its Exclusivity?

faberge_logo2.pngThe Faberge name has been purchase from Unilever by London-based private equity firm Pallinghurst Resources and is literally working with descendants of the Faberge family to bring the brand name back to its former glory.

The story behind exactly how Pallinghurst managed to acquire Faberge seems to be one of a full-on siege between Unilever and an aggressive fund that methodically brought up “vulnerable rights” of Unilever’s Faberge portfolio until the company was forced to sellout.

Unilever bought the name for $1.6 billion in 1989 and the final sale price to Pallinghurst is undisclosed but must be rather large since the company is investing $450 million into Faberge’s revitalization. That’s quite a sum for a brand name that we all know from the fabulous eggs, the last one was made in 1917, just before the fall of the Czars in Russia.

faberge-eggs1.pngTrendhunter asks if the brand can become cool again after years of languishing in the Unilever stable. Well, that depends on how you define cool.

The eggs themselves still cause controversy and stand as emblems of excess, but also examples of exquisite, old world craftsmanship. The new brand naming will be appended to “objects of art, fine jewelry and items such as ashtrays and pillboxes,” but not to clothing and perfumes. There do not seem to be any plans for a new egg to be made for some Russian billionaire.

The Faberge brand is probably the most luxurious brand name out there and its proper place is on really, really high end consumer goods. It is interesting to see how people from the Faberge family have been invited to help build the brand, giving it an authenticity that has been missing in recent years.

multicolored gems.pngBut make no mistake, the brand name has been acquired to also help promote Pallinghust’s new mining venture that will sell Faberge colored gemstones into the industry. These gems will be laser engraved with the Faberge name, allowing people to figure out where they came from which will also give them additional value.

"Imagine a Faberge gem versus a no-name gem,'' one investor said recently, "Then take them 50 years into the future and try to sell them at Sotheby's or Christie's. Which gem do you think will sell for more?''

This reminds me of the Forevermark on De Beers diamonds that assured customers of quality and its origin from a reputable mine, meaning that it’s not a blood diamond. That’s probably no coincidence, since this company wants to create a diamond brand as well. This means that Pallinghurst is going to have a brand name with the same recognizability as the one hundred year-old De Beers name.

It’s a savvy move. The high end luxury line will add luster to the colored gemstones and create an immediate buzz around the new venture.

More than likely the luxury line will be a means by which consumers can choose Faberge gems for their jewelry, giving the name an allure, and a use, that it has never had.

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Posted by William Lozito at May 27, 2008 7:59 AM
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