Archive for July, 2010

LaGrange Faces Federal Lawsuit Over Pawn Shop Denial

Friday, July 30th, 2010

From Chicago Tribune Dot Com

La Grange faces federal lawsuit over pawnshop denial
July 29, 2010|By Art Barnum, Tribune Reporter

The village of La Grange and three community leaders have been sued in federal court by the bank and property management firm that worked unsuccessfully with a Berwyn businessman to open a pawn shop in downtown La Grange last year.

Oxford Bank and Trust, with corporate offices in Oak Brook, and Fifth Avenue Property Management, with corporate offices in California, filed the lawsuit earlier this month is U.S. District Court in Chicago.

They claim in the suit that their constitutional rights were violated when the village refused to issue Andrew Grayson a building permit and amended a zoning ordinance to exclude pawnshops following the public outcry that arose after the village had initially granted him a business license to operate All-Star Jewelry & Loan. The shop would have been in a building at 71 S. La Grange Road, next to the Village Hall.

The lawsuit contends that Village President Elizabeth Asperger; Village Manager Robert Pilipiszyn; and Michael LaPidus, former president of the La Grange Business Association, conspired against the proposed pawn shop operation and therefore cost the two business enterprises proceeds. The building remains unoccupied.

A lawsuit against the village last year in Cook County Circuit Court by Grayson was dismissed.

The federal lawsuit is seeking in excess of $75,000 for all monetary losses suffered by the two firms and punitive damages.

Attorneys for the village and the businesses could not be reached for comment on Thursday.

abarnum@tribune.com

Giving New Life to an Old Profession

Tuesday, July 27th, 2010

From Triangle Dot Bizjournals Dot Com

Giving New Life to an Old Profession

Owner of eight pawnshops says perceptions are wrong, and he aims to change them

Triangle Business Journal – by Dale Gibson

Bob Moulton converted the old Don Murray’s Barbecue building into what he says is the prototype of the modern pawnshop.

DURHAM – If Bob Moulton hadn’t ended up in the family business, he might have been an actor: picture “Tick Tock” McLaughlin, the William H. Macy character in the movie “Seabiscuit.”

Reddish hair, thin build, a propensity for making funny. Moulton once used his impersonation of an Indian customer to rib one of his employees over the telephone. He was the class clown at Southern Durham High School, had designs on going to the North Carolina School of the Arts, but ended up as a radio DJ for meager pay at stations in Rock Hill, S.C., and Concord.

When he got married in 1983, he was making $80 a week.

He somehow made it. “I’ve been poor, but I’ve never been broke,” says Moulton. Still, 80 bucks a week wasn’t cutting it. He quit radio and moved back to his hometown of Durham to help his mom in her recently opened pawnshop.

There, he learned the business from his mother and an uncle, who also operated a shop. In 1986, Moulton opened his own store and has been a pawnbroker ever since – now operating eight stores in Durham, Raleigh and Wilmington.

He figures he spent around $2.5 million turning the defunct Don Murray’s Barbecue restaurant on Capital Boulevard in Raleigh from a grease-stained and rundown building into what Moulton declares to be the prototype of the modern-day pawnshop – National Pawn – complete with a walk-in vault that would be the envy of any banker.

Wander into that store, and the stereotypes about the pawn business drift away. On one side is a jewelry showroom as fine in decor as a shopping mall jeweler. On the other side are attractively displayed pawned items for sale – computer games, guitars, hand drills, television sets, even one iPad has found its way to hock.

Moulton is about building a business – and he and his wife, Teresa, have one now that generates some $7.5 million in revenue and provides jobs for 55. But he’s also about changing the way the public perceives the pawn business. “My mission is to improve the image of the pawn business,” says Moulton, who is president of the N.C. Pawnbrokers Association and has been on the board of the national association for a decade. “I’ll put my business reputation up against anyone in town.”

He’s fully aware of the perception of the pawn business – dirty, dingy stores full of stolen property with brokers looking to buy way low and sell way high. So, rather than tucking his stores in unobtrusive corners in bad parts of town, Moulton looks for high-profile locations near good neighborhoods.

His stores are far from dirty. On the contrary, they are bright and inviting. The employees are dressed in uniform blue shirts. National Pawn has an A+ rating with the Better Business Bureau of Eastern North Carolina, with no complaints over the past 36 months. As for stolen goods, industry research says that less than one-tenth of 1 percent of pawned goods are stolen.

Pawnshops actually help track stolen items rather than hide them. Each day, every pawnshop in the state is required by law to submit a report to local police on every pawned item, including the serial number of the item and the full identity of the customer. If an item turns out to be stolen, the police confiscate it and the pawnshop loses the money it lent.

In fact, the pawn business in North Carolina is tightly regulated at both the state and local levels. The Pawnbroker Modernization Act of 1989 sets strict limits on monthly fees that can be charged on a pawned item – they can’t exceed 20 percent of the amount lent for the item.

Jim Sughrue, spokesman for the Raleigh Police Department, says the department has a “generally good relationship” with pawnshops. “They have an interest in taking in as little stolen property as possible,” he says.

As for margins, Moulton says his philosophy is to make a small profit on high volume.

He once made a $500 profit on a 5-carat diamond that had been pawned for $20,000. The lucky buyer had it appraised and found it to be worth $75,000, but Moulton had no remorse. “I’d rather have a fast nickle than a slow dime,” he says.

Thedford Starts New Pawn Shop Chain

Monday, July 26th, 2010

From Orlando Dot Bizjournals Dot Com

Friday, July 23, 2010
Thedford starts new pawn shop chain, plans 20 stores by year-end
Orlando Business Journal

- by Anjali Fluker

John Thedford is giving the pawn business another try — but this time he wants a different end ­result.

Thedford, who in 1994 established the Value Pawn & Jewelry chain in Central Florida, grew his business to 67 stores in Florida, Georgia and Tennessee with 700 employees and $120 million in 2007 revenue before selling the chain in 2008 to Austin, Texas-based publicly traded pawn giant EZCorp. for $115 million.

After the sale, Thedford was expected to become president of EZCorp, but opted out to create a new chain and write a book, Smart Moves Management. It will be published in October.

Last summer, Thedford’s new firm, Family Financial LLC, opened its first La Familia Casa de Empeno y Joyeria in Puerto Rico, expanding to two stores in February. This month, Thedford debuted his first Florida La Familia Pawn & Jewelry store in a 6,500-square-foot former Blockbuster Video shop on Curry Ford and Conway roads in ­Orlando.

Boom Times For Diamond District

Saturday, July 17th, 2010

From The Wall Street Journal Blog

By Michael Casey

July 16, 2010, 3:41 PM ET. Boom Times for Diamond District.

The world’s financial markets are living through a unique historical moment, one in which a deflationary present competes fiercely with fears of an inflationary future.

A weak economy and high gold prices create a perfect storm for pawn brokers. For proof, look no further than New York’s Diamond District on West 47th Street between Fifth and Sixth avenues. Here, deflation and inflation do battle on a daily basis, creating a new business opportunity for the jewelers who have plied their trade on that strip for the past 60 years.

Deflationary forces lie in the push factors that send a steady flow of people there to convert their gold-based valuables into cash, either through collateralized loans or outright sales. They are the victims of a moribund economy whose modest recovery from last year’s recession is failing to produce jobs or small business revenue growth.

Yet there’s also inflation at work. It’s there in the pull factors driving this business. Both the buyers and sellers on the street know that gold prices are near record highs around $1,200 a troy ounce and are seeking to exploit that. Gold’s gains reflect the broader concern that indebted governments will be forced to devalue their fiat currencies and create monetary inflation.

“It’s usually one or the other that drives this business. Either the economy has come down and people need money, or the gold value has gone up. But in this case it’s both,” said Roni Rubinov, who runs both a pawn broker and jewelry-buying business out of side-by-side offices on W. 47th Street.

He says the flow into his pawn business has, if anything, increased since the 2008 crisis. It’s a trend that reflects the persistence of deflationary pressures in an economy with 9.5% unemployment. Just look at Friday’s data releases: the U.S. consumer price index down 0.1% in June, average weekly earnings down 0.2% in the same month, consumer sentiment down almost 10 points in July.

The flow of pawn customers has increased because the depletion of people’s cash holdings has been “a gradual process” since the crisis, Rubinov said. “It’s not a sudden assault as if someone robbed them…it’s that the well is slowly drying up.”

“The way I’m hearing it, the banks are holding off on personal loans. I guess the public doesn’t have anything else to fall back on,” Rubinov said. He found a moment to talk during a brief break in the stream of clients coming up the stairs, each escorted by a scout from the street carrying flyers that say “We Buy Gold, Diamonds, Watches & Jewelry.”

His analysis of banks is spot on. The Federal Reserve’s latest monthly consumer credit data produced its 18th contraction out of the past 20 months.

Yet, inflation fears are equally powerful.

Yale Zoland, a third-generation jeweler two doors down from Rubinov, did virtually no gold trading until the price started to rise. Now it’s worth up to 15% of his revenue.

It’s a simpler, more commoditized business than the complicated diamond trade his family has traditionally handled. The customers come in and hand over their gold rings and necklaces to Zoland, who weighs them, verifies their carat stamp with acid tests and then offers the sellers a price a few percentage points below that day’s gold fixing. At the end of business, he sells the day’s intake to gold refiners, who melt it.

Given the current public mood, this trade seems unlikely to disappear soon.

It’s about the trust that was destroyed by the crisis, Rubinov said. “People are realizing now they need to have something tangible, not just a piece of paper.”

And yet it is paper — greenbacks, to be precise — that the people coming into his office most want.

Sheriff Appears in Tulsa Pawn Shop TV Spot

Wednesday, July 7th, 2010

From Tulsa World Dot Com

Ad man

by: World’s Editorial Writers
Wednesday, July 07, 2010

It’s inappropriate for a county sheriff — in uniform — to endorse a pawn shop and precious metals dealer in television advertising.

Rogers County Sheriff Scott Walton, who first got his face in the public’s eye by being a spokesman for the Tulsa Police Department, appears in TV spots for Tulsa Gold and Gems.

Walton says he has been a friend of the owners of the business for more than 20 years and isn’t paid for his appearance.

We’re glad he’s not doing ads for his enemies and that he isn’t taking money for the ads. That doesn’t make it any better.

He also says that even if he’s an elected law enforcement officer, he still has the right to express his opinion, which is certainly true.

But if he is only expressing his own opinion, why wear the uniform? Why not wear a business suit or a shirt with the logo of the pawn shop?

We suspect the uniform is part of the message, an attempt to give the business the implicit endorsement of law enforcement, which is why the ads are inappropriate.

When you get a badge and a gun and the authority to arrest people in the name of the state, you should recognize that your voice represents more than just your own opinion, especially when you are wearing your law enforcement uniform.

Walton’s appearance in the ads appears to be legal, which isn’t to say it is the right thing to do.

The final judges in the matter, of course, will be the voters of Rogers County. If they like seeing their sheriff shilling for a Tulsa pawn shop, then so be it. We suspect otherwise.

Copyright © 2010, World Publishing Co. All rights reserved

All Pawn Shop Transactions Will Cost a Dollar

Friday, July 2nd, 2010

From AZSTARNET Dot Com

NEW CITY FEE FOR PAWNSHOPS
All pawnshop transactions will cost a dollar
Brian J. Pedersen Arizona Daily Star | Posted: Friday, July 2, 2010

ALLISON MULLALLY / ARIZONA DAILY STAR

Sandro Sanchez, examines a pawn ticket at Gold & Silver Exchange, 4636 S. Sixth Ave., with shop owner Armin Cicala. Tucson’s updated pawn ordinance went into effect Thursday, adding a $1 fee for all transactions made at pawnshops and secondhand dealers as well as new licensing fees and reporting requirements.

The transaction fee is similar to ones other cities impose, said Sgt. Diana Lopez, a Tucson Police Department spokeswoman.

“Most other cities charge $2 or $3,” said Lopez, noting that TPD had originally asked for a $3 fee but later agreed to the lesser charge.

The fees are expected to offset about half the estimated $700,000 annual cost of TPD’s pawnshop enforcement effort.

Pawnshops are able to list up to three items on each transaction slip, Lopez said.

A local pawnbroker said the new fee will hurt cash-strapped pawn customers – who turn goods in for collateral on short-term loans – when they can least afford it.

“It impacts every transaction, and it’s going to be charged upfront … so if I loan you $20, you’re going to walk out the door with $19,” said Greg Geile, owner of local SuperPawn franchise shops and president of the Arizona Pawn Association.

Geile said the industry had offered to pay licensing fees as an alternative to transaction fees, to spread the costs out more fairly.

But the City Council adopted a recommendation by Tucson police that included both the new transaction charge and new license fee.

Other details of the ordinance:

• Any pawnshop or secondhand dealer that had 1,000 or more transactions in the previous year is required to pay an annual $1,000 occupational license tax, which is due each January.

• Dealers from outside the city must pay a $1,000 fee if they hold three or more shows during a year within Tucson city limits. For dealers holding one or two shows each year, the fee is $500.

• All pawnshops and secondhand dealers must electronically report transactions to TPD. Any item with a serial number or owner-applied number must be reported, regardless of value, while any transaction that exceeds $100 must be reported except for furniture, music and books.

The Police Department has compiled a list of frequently asked questions for businesses and the community. Go to the department’s website at tpdinternet.tucsonaz.gov/FAQ/ pawnfaq.html for more information.

Contact reporter Brian J. Pedersen at bjp@azstarnet.com or call 573-4224.

Pawn Shop Owner Hopes New Site Anchors Growth

Thursday, July 1st, 2010

From Springfield News Sun Dot Com

Pawn shop owner hopes new site anchors growth
By Elaine Morris Roberts, Staff Writer

SPRINGFIELD — A broken water pipe and the ensuing flood for one downtown business owner has now spawned ideas of greatness.

Sam Beloff, owner of Rose City Fine Jewelry and Loans, LLC, was forced out of the space his business occupied on the ground floor of the McAdams building — 37 E. High St. — after a pipe burst, flooding the basement of the building with what Beloff said was 14 feet, or about 800 metric tons, of water.

Beloff was lucky, though, in that there was no water in his store, but he was directly over the flood zone, which made staying impossible.

“High Street is on a slight grade, so the water was flowing away from us. We tried to hang on. We didn’t want to move the store — we had a great location on the downtown core block,” he said.

Moving the business is a project that will take Beloff and his two employees three to four months, he estimated.

“And we’re only two weeks into it,” he said.

The store is now located at 26 N. Fountain Ave.

The historic building Beloff decided on was originally constructed as a hotel with the lobby standing where his showroom, display cases and storage area now reside.

“The upper floors were the rooms and there was a bar in the basement,” he added.

Beloff is a third-generation pawn broker who grew up being a part of a downtown business. His grandfather, Max Beloff, opened Max’s Jewelers and Loan in 1933, which is now operated by Sam’s father, Larry.

Sam Beloff, who started in business with his father, sold his interest in Max’s a few years ago. He then teamed with friend and investor Glenn Altschuld Jr. to open Rose City in 2006.

When the flood forced him to start shopping locations, Beloff looked at two other spots outside the downtown, but realized he had to remain at the city’s core.

“But being such a proponent of the downtown, I felt I needed to stay…. I’ve always been an advocate for focusing on development that includes re-establishing what exists along side developing new and true leadership comes from acting on your beliefs,” said Beloff, a founding member of Center City Association.

The space Rose City now calls home is part of the only downtown block that has complete retail store frontage, Beloff said.

He’s now envisioning the block filled with boutique retail shops and eateries that will provide a reason for people to frequent the downtown.

“If we can make this block an anchor point, we could be known for something good again. It’s an investment of time and money, but we can create a pleasant place for people to shop and do business,” he said.

Beloff wants his individual business success, to be sure, but he’s working to help create a successful business arena for anyone who chooses to locate downtown.

“I want great success,” he said, “and to do that, it requires many businesses coming together…. The only way to achieve that success is to bring many into the fold, which will create more jobs and increase the tax base for the city.”

 

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Copyright © 2009 - Stephen Krupnik - All Rights Reserved
Pawnonomics by Stephen Krupnik tells the infamous history of the pawn broking industry and shines a bright light into
its darkest corners, while also pointing out some pinnacles along the way.