High street name Ramsdens has seen its pawnbroking books boosted to 拢7.5m in the first half of the year as consumer habits return following the pandemic.
The Middlesbrough-based lender and retailer saw its loan book grow from 拢5.7m in the same period of 2021 and said the squeeze on household incomes would likely lead to further lending.
CEO Peter Kenyon said: 鈥淧awnbroking is growing, really as a result of things normalising. In Covid times you couldn鈥檛 go out, you couldn鈥檛 get a coffee or a beer so people spent less and paid off their loans. People have spent more over the last 12 months, they start to overspend, have gaps in cashflow and they are starting to be impacted by rising living costs and pawnbroking is that short term, small sum solution for people, so demand has increased on pawnbroking.
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鈥淚 think it will grow. It鈥檚 that short-term solution, so if people get an unexpected bill that鈥檚 larger than they think and they鈥檝e got a gap in their cash flow, if they鈥檝e got a jewellery asset, they can always raise cash quite quickly and get a loan with a pawnbroker or ourselves, so I think there will be that demand, it will continue. But people are very careful. Pawnbroking customers are very careful because it is their store of wealth. They have to give us an asset and they have a confidence they can repay the loan. It鈥檚 just over 10% that don鈥檛 pay the loans back and for those 10% they don鈥檛 have any debt consequences if we sell the goods and there鈥檚 a shortfall. If we sell the goods and there鈥檚 a surplus that money is due back, and we pay it back to customers.鈥
The company also saw jewellery sales rise 62% to 拢13.08m after investing in window displays of its new and second-hand products, while online jewellery retail sales increased by 48% year on year to 拢2m.
Meanwhile, foreign currency exchange sales rocketed from 拢20m to 拢94m, but have still yet to reach pre-pandemic levels, currently reaching around 85% of those rates, and gross profit from that arm of the business increased from 拢1m to 拢3.4m. Mr Kenyon said the firm expects the firm鈥檚 foreign exchange business to return to normal next year.鈥
鈥淧re-Christmas we were at 30% of normal levels, March 60% and May was 85% if normal levels. I don鈥檛 think we鈥檒l get to 100% this summer but you don鈥檛 know - there鈥檚 great demand for travel so that has recovered well.鈥
Ramsdens currently operates 156 stores across the country, and Mr Kenyon says the firm has set a target of 200 shops to be opened within the next three to four years 鈥 expansion which he said should lead to the creation of around 200 new jobs.
Mr Kenyon said: 鈥淥ur first target is 200 and hopefully we can do that in the next three to four years. Including the head office that would create up to 200 jobs.鈥
Those jobs include around 50 roles set to be created in the next four months through new store openings, adding to the latest shops in Chatham and Glasgow during the period, as well as a store acquisition in Boscombe.
Five further openings are expected in the second half of the year, with a 鈥渉ealthy pipeline鈥 of new stores planned for 2023.
Across its network of stores it said lease renewals had resulted in rent reductions or greater flexibility, and sometimes both. Three stores - including Carlisle, Newcastle and Durham - had been relocated in May to take advantage of lower rents and better footfall locations.
He said: 鈥淣ewcastle is a prime example. We were in Grainger Street, halfway down to the station, we were out of the way. It was the old pawnbroking model of 鈥榯he customer finds you鈥. But Ramsdens is more than that, we鈥檙e quite diversified, retail is growing, foreign currency is our biggest revenue stream and we want to be where the people are. That鈥檚 why we moved to Eldon Square, and why we鈥檙e on the central square in Durham. We鈥檙e a broader business.鈥
