The Master, Judd Tully, gives the details on the Phillips de Pury/Mercury Group deal:
In early October, the Moscow-based Mercury Group, Russia’s largest luxury-retail company, bought a controlling stake in the cash-strapped auctioneer Phillips de Pury & Company. Although the sums involved in the private transaction were not released, a source familiar with the deal says that Mercury paid approximately $60 million for its majority share, of which “around 50 percent” was to cover Phillips’s debt.
It is also believed that Dmitry Filatov, the St. Petersburg–based food-production magnate, sold his 15 percent stake in Phillips to the Russian retailer in a separately negotiated transaction. Mercury is run by Leonid Friedland, whom the style writer Suzy Menkes has described as “one of the most powerful men in fashion,” and his associate, Leonid Strunin. With reported annual revenues of more than $8 billion, the company operates high-end department stores and shopping centers, including the prestigious TsUM, in Moscow, offering such labels as Gucci and Prada, plus luxury items like Rolex watches and even Bentley and Ferrari cars.
Having established itself in upmarket retail, Mercury has taken the logical next step of engaging “in contemporary art and design, which are the objects Russian millionaires want as they climb the social ladder,” says the Frankfurt-based art consultant Nic Iljine. [ . . . ]
Speculation abounds about the circumstances surrounding the Russian company’s buyout of Phillips, which came less than two weeks before the house’s humiliating October 18 contemporary evening sale in London, where just 25 percent of lots sold by value. “No one knows what the story was,” says one New York private dealer who insisted on anonymity. “But Simon has lost a lot of money.” Last year the house’s sales total was $308 million, more than three times 2004’s figure—but even with that increase, Phillips is faced with current and overhanging costs, including those involved in 2006’s multimillion-dollar expansion in London and a new headquarters there, not to mention consistently aggressive guarantees offered to woo consignors. Childs emphasizes that, “All consignors to our sales have been paid according to the terms of agreement made between each consignor and Phillips de Pury & Company.” [ . . . ]
Mercury Rising (ArtInfo)
