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More high street pawn shops could be on the way

Pawnbroker group aiming for 250 store chain

More high street pawn shops could be on the way

Pawnbrokers could spread across UK high streets at a similar rate to coffee chains according to the head of the UK’s largest pawnbroking company.

John Nichols, chief executive of H&T Group, said the industry was expanding rapidly as its image became more mainstream.

He said H&T, which currently has 106 stores in England and Scotland, plans to more than double its outlets in the next four to five years.

Popularity linked to rise in gold price

His comments came as the group posted a 36.5% rise in pre-tax profits, helped by its expansion programme, new customers and the rising price of gold.

Mr Nichols said H&T had ‘very strong’ opportunities over the next four to five years and aimed to grow to around 250 stores in that period.

He said that while the potential size of the market was not known, there were parallels with the growth of the coffee industry, which saw many different firms open stores on the same high street.

‘At the moment you are seeing one or two pawnbroker shops on your high street, you may see three or four in the next four years.

‘We have a much bigger footprint now. It is much more visible now people understand it – it’s not that service that is hidden around the back of a jeweller’s shop.’

Group’s success not linked to downturn

Mr Nichols said the growth in profit for H&T was consistent with previous years and dismissed suggestions that the economic downturn had boosted business.

The firm – which made a pre-tax profit of £10.1 million in the year to December 31 – saw its pawn pledge book increase to £32 million, from £27.8 million in 2007.

H&T charges an interest rate of 8% on loans made against pledged items, which generated £19.7 million in gross profit for the year compared with the top Which? Best Buy loan which has a rate of 7.8% for a £5,000 sum.

Gold rush

A further £11.9 million was made through the disposition process, mainly from retail sales, which bucked the gloomy trend for high street jewellers with turnover up 10.7% on a like-for-like basis.

Rising gold prices also contributed to profits growth, adding £1.8 million to the group’s takings from its scrap business.

Mr Nichols said H&T had revamped its branches to represent their new image as a ‘cross between a building society and a high street jeweller’.

Avoid ‘pay day loans’

The group also provides short-term so-called ‘pay day advance loans’ something Which? strongly advises against taking on because of the often cripplingly high interest rates. 

Because the loan is for such a short period, APRs of 1,500% are not uncommon. 

If you are facing problems with debt, check out cheaper ways to borrow in our guide to your loan options or contact your local credit union.

Also if you are struggling financially, make sure you read our advice on options available to you.


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