Gemfields, the British mining corporation and owner of jewellery brand Fabergé, has revealed that the global health crisis will have a “significant detrimental impact” on its operations, revenues and business during 2020 and possibly beyond.
All standalone Fabergé retail points have now closed as a result of the coronavirus pandemic, including the jeweller’s directly-managed operations in Harrods in London and the Galleria Mall in Houston, and boutiques operated by partners in Dubai and Kiev. Additionally, approximately 80% of the jeweller’s multi-brand partners have closed their doors, as well as some 80% of the workshops that supply Fabergé.
Gemfields has also suspended all but critical operations at the Kagem emerald mine in Zambia for a month, and its operations in Mozambique, including the Montepuez Ruby Mine, are prepared to implement similar suspensions if necessary. Exploration projects have been suspended and the group’s offices in London and Jaipur are closed to allow staff to work from home.
But perhaps the biggest disruption is the postponement and possible cancellation of several key gemstone auctions. Last year, 93% of the group’s revenue came from these auctions, but widespread travel restrictions have hindered clients’ ability to closely inspect the gems before bidding.
“Once the travel restrictions are lifted, additional time will clearly be required before life and business returns to a relative 'normal'. There is clearly also a risk that travel restrictions may be extended or re-introduced should a second wave of virus infections take hold in key countries,” Gemfields said in a statement on Monday.
It was planning to host an emerald (high quality) auction in May, while a ruby (mixed quality) auction was set to take place in June. These are likely to be rescheduled for the second half of the year, and the subsequent emerald and ruby auctions could be cancelled altogether.
Shares in the group fell 0.6% to 8.45p on Monday morning following the announcement.