Investors turn to stamp collecting instead of dealing shares

Mar 14 2008

Rare stamps, autographs and memorabilia are becoming increasingly popular with investors as the economic climate worsens, it was claimed today.

The UK’s biggest retailer of collectibles, Stanley Gibbons, said its sales rose 21% to £20.2 million during 2007 as investors looked to diversify their assets.

Gibbons, which sells goods ranging from rare Penny Blacks to autographs by Marilyn Monroe, said pre-tax profits for the year to December 31 were a record £4.5 million, a rise of 20%.

Chief executive Mike Hall said: “Collectibles as an asset class are growing and tighter economic conditions are resulting in an increasing number of investors turning to our products as a means of protecting their wealth by diversifying their asset holdings.”

The company said that collectibles were becoming more popular within the savings and wealth management industries and were being seen as an alternative investment.

“Even now, our stamp and autograph indices are available on Bloomberg information terminals for institutional investors. A small increase in acceptance by institutional investors would make a significant positive impact on the growth potential of our businesses,” the company said.

Gibbons said visitor numbers to its websites were growing at pace having reached four million visits during 2007, up 40% on 2006. It is to expand the languages used on its site to cash in on the “Bric” emerging economies - Brazil, Russia, India and China.

The onus is on Stanley Gibbons not just to sell products, but to find the rarities in the first place. It says it has a “wants list” of more than £12 million worth of rare items its clients want.

Mr Hall is confident the future bodes well for the firm. “Increasing demand for our investment products, coupled with a better quality stockholding, place us in a strong position as we start 2008 with an increased momentum,” he said.

Andrew Wade, of stockbrokers Panmure Gordon, said highlights of the Gibbons’ results were a 37% increase in sales to investment clients and a 36% rise in sales of autographs and memorabilia.

“The business is continuing to deliver on its promises and potential,” he said.

Mr Wade added: “As well as the opportunity to grow its 1% global market share, Stanley Gibbons continues to have significant structural trends in its favour - in particular we note the shift to online and the recognition of stamps and historical signatures as alternative investment classes.”

He holds a target price of 265p - it is currently trading at just under 200p - and reiterates a buy recommendation.

The company was founded in 1856 by Edward Stanley Gibbons in London who built the business after buying a sackful of rare stamps from two sailors recently returned from South Africa.

The stamp business continued to grow - being awarded a Royal warrant in 1914 - before it launched an auction house and expanded into other rarities and collectibles.