They see an increased demand for their services "since high street banks have reduced lending levels, making it harder for individuals and small businesses to access loans. As a consequence more customers are experiencing the ease and simplicity of accessing short term, flexible loans via our stores." (albemarlebondplc.com). According to the National Pawnbrokers Association (NPA) there are about 800 pawnbrokers in the UK and this number is set to grow at 10% per annum.
A&B's pre-tax profits surged by 75% in the second half of 2009, despite a 5% decrease in retail sales due to a reduced demand for gold jewellery as more people pawn or sell their jewellery rather than buy any. Higher gold prices also helped to boost profits. "Consumer awareness of the higher price of gold and difficult economic conditions are creating increased demand for short term cash." The following six months saw a 48% increase in turnover, and although early this year there was a 1% drop as they funded their ambitious store expansion, by May 2011 their "pledge book" (the pawnbroking side of business) had risen 24% over the previous year.
Meanwhile, Signet (parent company of H Samuel and Ernest Jones jewellers) reported UK sales were 'flat' at 0.2%. These high street jewellers do not offer other services except repairs and fittings (although they do buy gold online).
On the website of Albemarle & Bond's rivals H&T Pawnbrokers – at no.72 Deptford High Street, next door to Coral the bookmaker – the cost of their pawnbroking loans is clearly spelt out: they will charge £144 on a £300 loan over 6 months which they claim is an APR of 119% (we make it an APR of 150%?).
Over at Fish Brothers – a couple of doors down near Paddy Power – we find a monthly interest rate of 6.5% for loans of £5–£999, supposedly an APR of 93%. They also give examples, which make the whole business look quite agreeable: only 50 quid to pay on a £2K loan over 15 days with a diamond ring as collateral. Only 12 quid on a £100 loan over 2 months with a gold bracelet as collateral. Only 36 quid to pay if you borrow £5500 for five days! Amazing.
What rates can we get at The Money Shop (in between Ladbrokes and William Hill)? At their yellow & black website, the only rate advertised is the special offer on PayDay loans: £90 over a month will cost a tenner instead of the usual £17, with an APR of 260%. The Money Shop is also a pawn broker but doesn't pretend to sell jewellery.
Albemarle & Bond (who aim to be across the road dead opposite The Money Shop) are not as forthcoming about their pawnbroking rates as their competitors. But on an equally gawdy yellow and black website they advertise a typical APR on a £1000 loan as 281.5%.
With so much building going on in the area, they must be anticipating an increased market in cheque cashing and payday loans. Branding wise, A&B, in its use of the same garish yellow as The Money Shop, appear to be competing directly.
A bank loan is much cheaper than a pawnbroker loan, but banks generally don't lend small amounts except as overdrafts which can be expensive. Pawnbrokers like to say they perform a valuable function for people struggling on benefits or low wages, those who don't have bank accounts or can't get overdrafts, those with a bad credit history or with county court judgements against them. But a member of staff at Deptford & New Cross Credit Union (165 New Cross Road SE14 5DG, 020 7277 7477) told us that often some of their members have joined the union to borrow money to pay back a pawnbroker loan that has spiralled out of control. The not-for-profit Credit Union has all sorts of members, both working and unemployed, who may access cheap loans at 1 or 2 per cent. Unfortunately the Credit Union cannot provide on-the-spot loans (a loan may take ten days to set up).
Hogarth captures the scene outside Paddy Power and Ladbrokes (Wikimedia Commons)
Pawnbrokers have always had a place in the high street, but do we really need four of them within spitting distance of each other? It doesn't help that the main Building Societies keep closing branches but at least banks and building societies are regulated to some degree. Although pawnbrokers are required to ask for ID when they lend and buy, it seems they have to be reminded to be vigilant about receiving stolen goods. According to a news report in the Evening Standard in August, robberies had leapt by 18% in the previous three months resulting in Cash Converters signing a deal with the Met to exchange information.
Meanwhile, the intended site of Ablemarle & Bond is far from ideal: opposite two bookies and a 'money shop', within a 150m stretch that has five bookies and three money lenders. It's no coincidence that betting shops always seem to be accompanied by pawnbrokers. Here's the cluster:
72: H&T Pawnbrokers
60: Fish Brothers Pawnbrokers
52: Paddy Power
44: The Money Shop Pawnbrokers
38-40: William Hill
37: Albemarle & Bond Pawnbrokers
Albemarle & Bond are applying for change of use. The shop used to be an amusement arcade and was not classified – arcades and theatres among others are 'sui generis' (of its own kind). It is likely the amusement arcade suffered with the increase in the number of betting shops full of slot machines. A&B's application is for A1 Retail use.
A&B know this part of the high street is a Designated Core Retail Area and are at great pains to emphasise that their main business is Selling Jewellery – even though they admit in their own reports that there is a big reduction in retail sales and their website plays down the retail aspect: "Our high-street pawnbrokers specialise in a range of pawnbroking services, gold-buying, pay day and short-term loans and offer a range of quality pre-owned and new jewellery through convenient locations across the country...Our friendly and experienced staff can help you manage your finances or find the perfect gift."
The amusement arcade as was...run out of town by the betting shop slot machines?
Just as the bookies take advantage of planning laws that enable them to easily take over pubs and estate agents (A2 class), pawnbrokers are classed as A1 as long as the cheque cashing and similar activity remain ancillary to the main use as pawnbrokers/jewellers. But who's going to check?
As Albemarle & Bond open more and more retail outlets (like Paddy Power and Betfred), in areas where property is cheap and punters are desperate for cash, they have modernised their shopfront design. Retail-jeweller.com reported in February 2011 that A&B were "rolling out a new fascia across its portfolio as it looks to revamp its image as its retail sales fall in the face of soaring gold prices." (Yet more proof that they are not primarily retail).
And A&B's new logo now features the word "Bond" more prominently – because, according to CEO Barry Stevenson, their "customers have difficulty saying 'Albemarle and Bond'".
How will this modern design go down with the planners? The proposed internally illuminated double sided projecting sign reading "We buy gold any condition" jutting out from the bright yellow fascia illuminated by a continuous strip light doesn't exactly conform to the guidelines issued by Lewisham relating to those properties considered as heritage assets. This is not a listed building, mind, but it is in a conservation area. A&B want to replace the present timber framed shopfront (which has panelled pilasters and stallrisers) with a modern aluminium frame so that the shop looks like all their other branches and pays little attention to Lewisham's Shopfront Design Guide which requests that traditional materials must be used in conservation areas.
If you feel compelled to write an objection, you may want to emphasise the unsuitability of the proposed shopfront design in a conservation area. This may carry more weight than arguing that Albemarle & Bond are not really retailers, or that we've already got enough pawnbrokers, or that this particular site is not suitable due to its proximity to a cluster of betting shops...Objections must be in to Lewisham by 4th October 2011. See the application here and the documents here.
Sign of the Times by Adam Vass, to be featured in Deptford X at The Bird's Nest pub (click to enlarge)
Crossfields residents may be interested to know that Lewisham Homes have teamed up with the Financial Services Authority (FSA) and their Moneymadeclear service to provide residents who need debt advice the opportunity to speak face-to-face with a trained money guide. They can provide impartial information and guidance with no fees. Call 0300 500 5000 or Lewisham Homes 0800 028 2028 (free from landline)/020 8613 4000 (if calling from a mobile) or go to www.moneymadeclear.fsa.gov.uk.
Debt advice is also available at 170 Community Project in New Cross Gate (170 New Cross Road, 020 7732 9716). Unfortunately the Deptford Citizens Advice Bureau no longer exists – Catford Citizens Advice 0844 826 9691 (5p per minute) is the nearest within the borough.