PdP Announces a Strategic Partnership with Russia’s Mercury Group
The auction house announce a strategic partnership between Phillips de Pury and the Russian Mercury Group where Mercury will control the company. Josh Baer surmises that the capital injection will cover Phillips de Pury’s debt.
Mercury is described in the PdP press release as “Russia’s largest luxury retail company whose holdings include The Tretyakov Projezd, the Barvikha Luxury Village and TSUM department store, high-end retail properties in the Moscow area that house fashion and jewelry brands such as Gucci, Prada, Giorgio Armani, Dolce & Gabbana, Rolex and Graff as well as showrooms for Ferrari, Maserati and Bentley.”
Phillips spokesman, Ariel Childs told Bloomberg:
“For us, particularly, it represents a substantially expanded capital base,” said Ariel Childs, spokeswoman for Phillips de Pury, in a telephone interview. “It means we can grow. It’s an added level of support that we are very pleased to have. I would expect that we’ll be holding sales in Moscow. We will keep our focus on contemporary art and design and the core business values will remain.”
Kelly Crow, in the Wall Street Journal, describes the deal as giving “Phillips deep pockets to keep funding its events and financial arrangements with sellers and buyers of contemporary art. Phillips is the first company in years to threaten the duopoly of auction houses ‘s and Christie’s International. The sale also raises the art-world profile of Mercury’s chief executive, Leonid Friedland, a relative stranger within art circles who is best known for building luxury malls in and around Moscow.”
Update: There are two Mercury Groups in Russia. There is no connection between Igor Kesaev and Phillips de Pury.
Other public mentions of Mercury describe it as ” a Moscow-based holding with businesses concentrated in four main divisions, including distribution and logistics; retail; heavy industry, manufacturing and mining; and property development.”
Igor Kesaev is #962 on Forbes’s list of world’s richest: “His Mercury group of companies started out as trader of imported food and cigarettes and became the largest tobacco products distributor in the country. In 2005 began widening its activities, when Mercury acquired a controlling stake in Sibir Energy. Its Mercury Development is now an investor in a large construction project in St. Petersburg. At the end of 2007 bought a controlling stake in Dixy Group, the sixth-largest retail chain in Russia.”
Kesaev’s wife, Stella Kay, was profiled in the Financial Times two years ago. The FT described her in terms of art:
Stella Kay stands in front of a Robert Mapplethorpe self-portrait in her office, the one where he sits in a silk bathrobe holding a skull like Hamlet. Kay herself, a 41-year-old Russian Amazon dressed in a tight black-and-white Chanel suit and suede boots, could have stepped out of a Robert Longo painting. Like any good New Russian woman, her raven hair is long, her make-up heavy. Phone jewellery is strapped around her ear. She’s stunning, she’s rich and her newest toy is a gallery. Surprisingly, Kay personifies a new type of guardian angel for contemporary art in Moscow. Along with Marianna Sardarova, owner of the RuArts gallery, and a few other wealthy wives, she has helped establish a scene with buyers and collectors in just a few years. This is a marvel in a country where contemporary art, from constructivism to conceptualism, never officially happened. [ . . . ]
Kay, aka Stella Kesaeva, wife of the Russian tobacco tycoon Igor Kesaev, didn’t start small. Self-educated in art, she hired knowledgeable curators. For her first exhibition in 2003, she brought Warhol, Wesselman and Basquiat to Moscow. Even Warhol was considered an exotic sensation. And nothing quite like Jean-Michel Basquiat’s edgy, primal, urban art had been seen in Russia.
All press reports have mentioned Leonid Friedland as Chairman and CEO of Mercury. So there is no confirmation that the Kesaevs are involved in the deal.
The International Herald Tribune ran a story in November on Moscow’s high-end retailers where it discussed TSUM and Mercury Group:
TSUM, next door to the Bolshoi Theater and a short walk (or chauffeur-driven ride) from the Kremlin, is at the forefront of the luxury retail wave. The Italian retail mastermind Vittorio Radice oversaw major improvements in 2005 and, with the most recent improvements unveiled in September, the store has doubled in size [ . . . ] The store is owned by Mercury Group, distributor in Russia of dozens of luxury brands, from cosmetics to fashion to jewelry and, as of October, the Bugatti supercar. Kommersant, a business newspaper, reported in September that the group’s 2006 turnover is estimated at $850 million.
Moscow’s Guardian Angels (Financial Times)
A Revolution in Retail Beyond Red Square (International Herald Tribune)
Phillips Auction House is Sold (Wall Street Journal)
Phillips de Pury Partnership with Mercury Group (Press Release)