Sell historical background, Russian jeweller expert advises

Sometimes a peace of jewelry is the work of art. But it is always a commodity. Valentine Skurlov, consultant of the Russian branch of Christie’s, expert of the Ministry of Culture of the Russian Federation, Companion of the Carl Faberge order, historiographer of Faberge Jewelry House and author of a number of books dedicated to this theme, member of the editorial staff of “ Antiquarian review” and “Russian Jeweller” specialized magazines talks with   Rough&Polished about a specific nature of the jewelry business.

- How did your cooperation with Christie’s begin?
- With the nodding acquaintance with a Russian emigrant from a good family (his mother is princess Shakhovskaya) who has been working in the Russian branch of Christie’s since 1984. I was asked questions about archives: things which are recorded in catalogues with reference to archives are very valuable. The famous icy egg – a Christmas egg for Mariya Fedorovna (6000 diamonds in a form of frosted finish, in crystal, in platinum casts and inside the egg in flowers in a small basket) was sold in 1994 by auction in Geneva and held a record of Russian antique sales – 5,6 million US dollars. I found a bill for this egg in the archive, it cost 24600 rubles. When I was asked what this money was equal to that time, I answered: a colonel was paid that time 120 rubles and the salary of earl Kokovtsev, then Prime Minister was 17 thousand rubles per annum. If denominated in US dollars it is equal to nearly 200 thousand US dollars i.e. the salary of US President. Historical documents are of great importance for a preliminary estimation. Then I found documents for them for a watch with silver Cupids, a present to Alexander III and his wife on the occasion of their silver wedding. The auction was going to estimate it at 300-400 thousand US dollars, but I found a bill according to which it cost 18875 rubles; then the estimate reached 800 – 1,2 million US dollars and it was sold at $1,6 million. Undoubtedly, with documents certifying the historical value and origin things cost much higher. As a matter of fact a historical background is sold.

- What are the selection criteria for an auction like Christie’s? Who determines the level?
- As a matter of fact the firm origin is of a huge importance. There is a group of court jewelers headed by Faberge; it is such an all-pervading brand that it is sufficient to pronounce this name for collectors to come to a point. It is important to prove the origin. In the West attached documents are trustworthy: it is good if a thing was sold in previous auctions (in the 50-60s), was exhibited in expositions. Now collectors exhibit these things in expositions and exhibition catalogues describe when this thing was received and who the author is. As an expert I am amazed when a thing (for example, made in 1930, not so outstanding) is deposited into account and it is obvious that the paper is yellow and it clearly states the number of diamonds, their weight and the identity can be always checked. Besides Faberge there were other diamond experts not worse than Cartier, Tiffany, Lalique or Castellani, but there are no studies about them except Bolin. Bolin by the production output was compared with Faberge, but he had ten times less employees than Faberge and he had great current assets. Faberge often used semiprecious stones (for example, collected by royal children in Crimea) along with diamonds, the beauty of painting was also important; a jeweler’s labour earning profit was sold. Bolin used to buy precious stones, added casts to them and the profit was 10%, while Faberge gained 100-200% of profit. He was generally a genius; I have been studying him for 20 years.
What is Christie’s? They had a sales volume last year of 3 billion US dollars (Sotheby’s had $3,6 billion). The best auctions in our speciality are held in New York and London. Before 1998 there was Geneva as well, but taxes are very high there, there are some visa difficulties in New York (many Russian antiquarians, for example, Joseph Kobzon are banned to enter the USA), so the centre of gravity was shifted to London. I go to London twice a year; in the latest catalogue the section “Russian art” is divided into painting and decorative applied art (when there are many lots, a separate volume, sometimes two are complied) where the jewelry art is included occupying 70%, porcelain and bronze, sometimes ceramics.

-         Are there unmounted diamonds at Christie’s?
- Certainly, they are presented and sold: “magnifique” diamonds are a separate direction of sales to which I have no connection. What amazed me during the latest sales: an unmounted blue diamond of the 20s of even an unknown firm – a pendent suspension of 7,81 carats was sold for 2,2 million US dollars by auction (plus 12% of tax) nearly 5 million US dollars. It was in the catalogue of things from the former Italian queen. It had a pure and such sophisticated cutting that I have never seen before in my life.
The jewelry group exists independently and there are some old Russian antiques in this direction, but they are very few in the so-called “Russian sales”.

- How in your opinion the state should participate in the development of jewelry brands?
- Certainly, I believe that the state support is needed. Though it is difficult: any deputy will say why we should allocate money when our teachers are not paid enough? However, the state may appoint responsible persons for this direction: the lion’s share in the brand creation could be contributed by any large corporation –Nornickel or ALROSA and to help in all senses by patronizing and even allocating money.
Generally the cost of the brand may be considerable, in 2001 Cartier was estimated at 1,5 billion US dollars, Tiffanу – at 1,2 billion US dollars, though this brand included soaps, neckties etc. The sale volume of Bvlgary with respect to jewelries in 2002 was 330 million US dollars i.e. 10 million US dollars per each shop, it is nearly one million per month. It is very serious. In Russia nobody is engaged in this. Apparently the state has always no time to do that.
This year we conceded the Faberge brand to South African Pallinhearst investment fund. Recently I have visited London, we were together with Tatyana Faberge; she was appointed a consultant in the commission. They have registered the brand in more than one hundred countries of the World and now want to waive services of Victor Mayer who opened his shops throughout Europe and produces kitsch cheap products – eggs at 270-300 US dollars (90 grams of silver in enamel, phianites instead of diamonds etc). They want to make the only exclusive brand, there are also some rating, starting from 20-30 thousand US dollars up to jewelries worth more than a million. I was a witness when a red diamond of five carats was sold in 2000 for two million US dollars. Before that it was specially brought for a pre auction examination to the Armoury: 200 lots were brought for Christie’s and it gave a good result. Undoubtedly the brand should be developed and registered everywhere.
Though Faberge is the same national brand like Pushkin, Gogol or Kalashnikov who now says that we are losing a lot of money receiving nothing from Bulgarians and Cubans. I once traveled by train with a deputy director of the Kalashnikov company; they produce Kalashnikov vodka, it is not better than Stolichnaya, but it is sold because it is a brand. Tatyana Faberge was offered to produce champagne.

- In Cartier expositions cognominal champagne is offered.
- It is true, why not? It gives money. Anybody can buy any brand, any firm; it is a matter of price. Recently the Faberge brand has been bought for 40 million US dollars. But it can bring more income. Ananov twice bought the use rights for the Faberge brand for 40 thousand US dollars per annum and consulted with me whether it was expensive or not. He did it wisely and everybody began associating his brand with Faberge. Every brand requires a careful work. Marketing should be taken into account as to who is going to buy it.
My experience also shows that expositions should be held and a lot of printed matters issued. For example, the state might give a target grant for making a film or publishing a book. We don not have so many brands which have been promoted by Christie’s and Sotheby’s.

- Promotion of the jewelry brand is a long and costly task. Who should defray the expenses? Or it is everybody’s concern?
- It is a nation-wide concern. For example, in Ukraine though it sounds funny a law on fat was seriously adopted by the Rada. Fat is like a brand, it is prohibited to speak offensively about it. Somewhere a monument to the pig was erected.
Vice-premier Medvedev recently correctly said not to be in a hurry with the accession to the WTO. During two years it will spend every effort to ruin our national brands, because our market includes 150 million people and it is not the worst one. If you compare with Poland, I have been there many times, there are no elite, billionaires there, and as a result there is no antique market and boutiques like here in Russia.
Being in this environment for 20 years I see that now young businessmen at the age of 30-35 prefer to purchase personal things rather than old antiques. Old antiques, especially jewelries relating to persons bear heavy bioenergetics. What is the use of wearing a ring which belonged to Alexandra Fedorovna? She was executed. Many mystically think that they will have the same destiny. Make personally for me, I will pay good money. That’s why jewelry antiques frankly speaking are not of demand: it is difficult to sell some things, especially if they are impersonal without royal documents… When I was first in New-York I saw many shops in the fifth avenue - Tiffany, Cartier, Lalique, Bucheron, and all of a sudden I noticed some Russian shop like Felshtinsky. I asked about it. I was told that they did not know themselves. Some Russians arrived in early 90s and now they have as many jewelry sales as others, but there is no brand. Maybe, they need another 20 years to say: firm let it be Anno of 1994 or 1992 is the beginning of our capitalism, but it is of demand; it is not an easy thing to have withstood for 15 years and not to get killed or broken.

-         And what about our Russian jewelry traditions?
- I think that one of the reasons is that we had an empire state like England, Germany and Austria-Hungary. The empire suggests the shining of stones. Ambassador Morris Paleolog wrote that he had never seen such brilliance as in Russian balls and mentioned jewelries of the Vorontsov, the Sheremetyev, family jewelry, entailed property that could not be sold, only hand over to an elder son. And we have such traditions. 
We also have something to learn from. The Diamond Fund itself is a school that every jeweller has to attend. We should found such museums, assortment offices at large firms. 2200 employees used to work in the State Repository for Precious Metals before, now 300, there is a museum there, but who can see these products? It is vandalism! These collections twice were brought to Israel. 400 thousand US dollars were earned from the collection of the Diamond Fund in the USA, an unprecedented success, queues, and a catalogue at the price of $400. It is an example that such exhibitions should be carried out, especially abroad. Warranties and agreements should be made and reached at the state level, not to have exhibits confiscated as was the case with Swiss Noga. The West is advertising its brands: Cartier holds another exhibition, opens boutiques; there is a Cartier boutique in Kiev. Next year there will be an exhibition of Lalique and Faberge in five American cities. And what about our exhibitions? We can do the following way: we give you five Christmas eggs and another 5-6 items of modern jewelers… They: we do not want. We: if you do not want, we are not going to give you Christmas eggs.

- A young jeweler said that Christie’s wants to sell his things
- Let him first show a catalog. I know that many have been dreaming about it the whole life: all enterprises of the country want to get there. But so far there has been only one such experience. In 1992 when I worked in “Samotsvets” four rock cut figures were sold at   Sotheby’s at 14 thousand US dollars (good money that time), the following year this bird “Egret” was sold at 28 thousand US dollars. We offered Canadians who bought it to sell something else, but they said: we are not going to sell modern items; our clients thought that they were buying Faberge, though it was black and white written there “styled in Faberge”. So it means that they did not differ by quality... But the historical background is so important that it raises the price ten times.
As for the quality I was amazed when visited the Diamond Fund in late 80s. There was an exposition of things of the 70s belonging to famous jeweler Sitnikov who made by order of the government a number of items of Faberge style. As an expert I could not find any difference. It was an example of high professionalism.

-         Did he make his own things?
- He is not a painter, he is a jeweler. That is the problem of our jewelry business and art: we do not have painters. It was after the default that some revival began. Before that everything was taken from the West. We had a bad habit of purchasing everything there. Birnbaum said that Cartier jewelry bought for a wedding party the following day was brought back for repair: some stones were loose. Maybe in terms of artistic characteristics we are behind Paris jewelers, but as for the quality we are perfect. We have always had a good craftsmanship of reliability, meticulousness, assiduity.

-         Can you name some Russian brands?
- Apart from Faberge, certainly Bolin, but owners (Swedish) registered their ownership rights as far back as in 1996. There are some court jewelers. Among modern jewelers I would issue a Sitnikov’s album.
There are some people working in the avant-garde style by personal orders, but they do not hold any exhibitions. The situation is stagnant: neither the Armoury, nor the Hermitage holds exhibitions of Russian jewelers, but instead prefer to arrange foreign exhibitions for money, for example Swiss Gilbert Albert who complained that in Moscow he had been “stripped”. However, it is considered prestigious to hold exhibitions in New-York, London, Paris and Moscow, after that prices go up. I believe that the Hermitage, for example, should be recommended at the state level to hold jewelry exhibitions. Annually, seminars are carried out there on the jewelry business, once Matveev, deputy director of the Hermitage was asked when modern jewelry was going to be bought and displayed. He answered maybe some time after one hundred years – you are not ready yet. It is absolutely wrong. Many are ready to make gifts just to be represented. If a jeweler says that his things are displayed in the Hermitage, next day he will charge twice as much. That’s why before jewelers were seeking to obtain the title of His Majesty Supplier and during the New Economic Policy (NEP) if it was written: a former supplier of the imperial court it was by itself sufficient to certify quality, with this certificate one could charge 10-15 % more. Besides, it gave the right to place a two-headed eagle on the logo. In 2002 veterans of the ninth department of the KGB invented a name “Kremlin’s Supplier”, this title and certificate cost 500 thousand US dollars.

- In the mass products segment we are experiencing a huge pressure from Turkey, Greece, the Middle East; the Chinese expansion has already began. How can we resist the expansion of these markets?
- When we enter the WTO it would be wise to discuss some issues, for example, the said jewelry segment. We allow you in, but you also allow us to be represented to some extent outside. Before the revolution Khlebnikov and Ovchinikov used to sell a lot - the whole East was ours: Persia, Turkey, China. If we allow foreign jewelers in, it will be a shock: In St. Petersburg a good qualified jeweler may get $3000 per month without going to New –York. And when we enter the WTO jewelers from China and Hong Kong come here with their salaries of $200… I have a friend of mine in Thailand: they don not need a central heating, 200 men work in a hanger and make sneakers. There is a queue of one thousand men to get a job in this enterprise. Legislative preferences? Absolutely and necessary export incentives.
I have been always amazed by Italy. There is a jewelry institute there like a ministry or a state committee. It organizes training, contests promoting product brands. They understand that guys who study at schools and are sent to international contests, later on will bring export goods to Italy. By the way Italy has always controlled more than a half of the capitalist, as it was written that time, jewelry production. I remember in other times we processed at best 400 tons of gold, Italy – 426 and more. That’s the experience we should adopt, the market expansion experience.
Galina Semenova for Rough&Polished