The company, which has 167 stores across the UK, revealed higher profits in recent months
Ramsdens, the retailer and lender, has reported that more people are selling or pawning their jewellery or watches due to higher gold prices and a lack of short-term credit alternatives.
The company, which operates 167 stores across the UK, has seen an increase in profits in recent months, partly driven by a 15% surge in profits from its pawnbroking service. Pawnbroking allows individuals to secure a loan against the value of a piece of jewellery or a watch, with the item being sold if the loan cannot be repaid.
Ramsdens charges an annual percentage rate (APR) of approximately 154% for a six-month loan. Peter Kenyon, chief executive, said: “Pawnbroking has grown because of the lack of alternative finance providers.”
He added: “If you want to borrow £200 you used to be able to get credit, which has been decimated, or payday lending when it was seen as reputable.” He also noted the growth in services like Klarna’s “buy now pay later” and credit unions, but stated that pawnbroking is a good solution for those with an asset to pledge and in need of short-term financial assistance.
The average loan is £180, typically secured against a “couple of rings”. Kenyon emphasised that these are not “life-changing” amounts, but many customers turn to pawnbroking if they need “help through cashflow difficulty”.
Ramsdens has also seen growing demand for its precious metals business. The company has reported a surge in profits from its gold-buying service, raking in £5 million in just six months. This increase in profits is down to soaring gold prices, which have encouraged more people to cash in on their old treasures.
Ramsdens saw the average price of nine-carat gold jump to £19.45 per gram, compared to £18.25 last year. While profits from gold buying skyrocketed, the company’s retail arm, which sells new and second-hand jewellery and posh watches, saw slower growth.
Demand for pre-owned jewellery was strong, but sales of premium watches, like Rolex and Cartier, took a bit of a dip. However, Ramsdens’ boss, Peter Kenyon, said that demand for these luxury watches has picked up recently as prices have started to become more reasonable.
“Some watches were selling for £30,000 12 months ago, and they’re now £20,000,” Kenyon explained. The company’s total pre-tax profit grew by 8% to £4 million over the half-year, and it said it expects to further grow its profitability in the months ahead.
