Friday, April 29, 2016

Trouble in philatelic paradise???? The "Autumn of Discontent" for Scott and Gibbons...(Repost & Update)

This is a repost of a blog article from my 1.0 blog originally posted on 24 November 2015

For those of you who have visited either the Stampboards or Stamp Community forums in the last couple weeks, you may be aware that two of the most important names in the philatelic world, Stanley Gibbons and Amos Publishing (publisher of the Scott line of albums and catalogs in the USA) have both been having very trying periods.

In the case of Amos, it seems to be a massive technical failure that has completely eliminated their presence on the internet.  Going to the main Amos Advantage website only results in an error message and a note saying that the company hopes to be back online soon.  But for now, access to the products produced by Amos for the philatelic community via the publisher's own website is completely cut off.  With the holiday season rapidly approaching, hopefully these technical issues will be resolved soon, since I am sure that Amos, like most retailers, depend on holiday sales for a significant portion of their business.

While Amos grapples with internet gremlins of the first order, a much more potentially serious problem is growing for the British philatelic institution Stanley Gibbons.  A few years back new owners of the comany decided to take Gibbons into the world of Stocks, floating what had been a private company with what was, at the time, a fairly successful Initial Public Offer.  The management at Gibbons then began aggressively marketing the Gibbons company as an opportunity for investors in rare philatelic collectibles, promoting the idea that philatelic items could be a good alternative investment in an age of low returns due to the very low interest rates available in the West, and the uncertainty caused by the rapid gyrations of stock markets since the start of the 2008 Global economic crisis.

The year 2015 will likely go down as Gibbons "annus horribilis" in terms of its decision to travel down the investment pathway.  Investors have not invested to the degree imagined, and the auction market for the type of high-end UK and Commonwealth material that is the bedrock of Gibbons inventory has been flat at best and losing value in some areas.  Gibbons stock, which started the year with a value of over UKP 3.00 per share, has now fallen to  below UKP 0.90, a nearly 75% drop in value. 

The fundamentals of the Gibbons company do not augur well for a recovery any time soon. It's internet presence via the Bidstart marketplace (which Gibbons purchases a couple years back hoping to increase its internet-based retail presence) is dire and going through yet another revamping. Profits have not met market expectations, and the result has been a steeping downward slide in the value of the stock. Parts of the Gibbons empire, such as the Catalog business, remain vibrant, but that branch alone can not support a company whose marketplace ambitions may simply have been too big for the resources at its disposal.  Hopefully Gibbons will be able to turn things around, reorganize itself around its core philatelic business, and seriously rethink the idea of being a vehicle to promote stamps as an "investment opportunity" for those seeking a quick profit.  Hopefully this can be achieved without Gibbons having to be "liquidated" in wake of further profit losses, but its unclear just how much lower Gibbons' stock price can go before the marketplace starts to consider that the most likely option. 

For collectors in North America, there is a little solace in knowing that Amos Publishing is a privately-held company, so much less subject to the whims and pressures of a financial market that prioritizes short-term profit over long-term potential for growth.  As disconcerting as the longer than expected resolution of Amos' technical issues is, these issues should be resolvable in the end, and hopefully the financial cost to Amos will not have been too egregious. If Amos was in Gibbons' position as a publicly-traded company, the potential for investor flight gravely damaging the economic health of the company due to this technical crisis would probably have been immense.

I am not anti-capitalist by any stretch of the imagination, but sometimes keeping a company privately owned is a better option for the long-term health of the company instead of exposing the company to the whims of the global financial marketplace. I personally think the experience of Gibbons as a publicly-traded company illustrates the great risks that any company involved in collectibles faces.  In the end, philately really should never be seen as an investment tool, but rather for what it is, an enjoyable hobby that, perhaps over the long term, can also be profitable to the collector with a bit of luck, patience and time.


Since the original posting of this article back in November, things for Gibbons have gone from bad to worse.  Its share price on the London Stock Exchange is now less than a quarter of what it was in November, hovering around UKP 0.20 or so.  The management team has had to turn to stock owners for an infusion of capital, and there have been more than a few departures from the management team (some I will wager jumping with golden parachutes as is common in the world of investment capitalism these days). 

The Gibbons catalogue line is still being produced (they just released a brand new title Arabia covering the Arabian Peninsula, a welcome addition as this is an area of the philatelic world with little specialized guidance available, especially outside the British-influenced areas along the Persian Gulf) but their Bidstart marketplace looks set to be wound down, and overall the company seems to be on more than a bit of life support at the present.  Hopefully for the futue of the hobby the Gibbons name and its essential production of catalogues survives these troubling times, but it still looks very touch and go as far as the current organizational setup of Gibbons is concerned.

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