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What does the report cover?

This pawnbroking market report includes traditional pawnbrokers, stores which focus primarily on trading of second-hand goods – in particular jewellery and consumer electronics. It also includes those whose main focus is high-interest lending such as payday loans, term loans, cheque cashing, money transfer and foreign currency exchange.

There is significant overlap between these activities with most of the leading chains now carrying out a mix of each.

The report describes in detail how, and why, the pawnbroking market grew at rapid rates in the period up to 2013 before decreasing in size in the last couple of years.

It quantifies the pawnbroking market size, historical growth rates, segmentation patterns and levels of industry profitability. The report reviews key factors behind these figures.

It also carries out an in-depth analysis of the relevant drivers of industry growth – including the macroeconomic environment, impact of the gold price and changes in the regulatory framework – setting out historical trends and available forecasts.

Apex Insight’s forecast for the loan shop and pawnbroking market growth is based on this analysis of historical trends and growth drivers.

Questions addressed by the report

– Was the pawnbroking market driven by a gold bubble or is there underlying growth in the market?
– What impact has the tightening of payday lending regulation had on high street loan stores?
– How has each of the leading chains performed? What are their areas of focus?
– How does industry revenue segment between different service lines such as pawnbroking, payday / term lending, gold buying and retail? How has it changed and how do we expect it to change in the future?
– Is ‘posh pawn’ now an important area?
– Does comparison with the US pawnbroking market suggest potential for further growth?

Who is the report intended for?

– Operators of pawnbroking and retail loan stores
– Investors in these businesses
– Potential new entrants to the market
– Market regulators and policymakers
– Banks, analysts, consultants and other parties with interests in the sector

What are the sources and methodology?

This report is based on
– Interviews with senior-level contacts in the pawnbroking and consumer credit industries
– Extensive research into published industry sources
– In-depth analysis of the macroeconomic environment and relevant market drivers
– Financial analysis of the accounts of companies in the industry

Information from these sources has been synthesised and presented clearly and concisely with extensive use of charts and tables to illuminate points and support conclusions


Market background

The market consists of high-street shops which offer combinations of pawnbroking and other lending services such as payday and term loans, purchase of second-hand goods including gold jewellery, electronics and other items.

Most of the main chains have their roots in one area but there has been convergence with most now offering a mix of these services

Pawn loans are typically for up to two-thirds of the value of a pledged item.
– The principal plus fees and interest is repayable on or before the end of the agreement, usually six months later.
– If the loan is not repaid, the item is forfeit and will be sold to repay the loan.
– Around 30% of pledges are not redeemed

While press reports often focus on ‘posh pawn’ involving middle class customers with assets but not cash, interviews suggest it is a small part of the market and research shows that most loans are for either day-to-day spending or household bills.

Loan costs are c.120% APR. This is more expensive than conventional credit but cheaper than other forms of high cost credit such as payday loans or doorstep lending.

Store location is very important as most people do not travel far to visit a pawnbroker.

Pawnbroking market growth and drivers

The market grew from 2009-13 to reach well over 2000 stores across the UK.

Market growth was driven by
– A significant increase in the number of customers in the sub-prime segments as a result of the economic downturn,
– Significant reduction in the appetite of the mainstream banks for serving such customers,
– A sustained rise in the gold price in the decade leading up to 2011-12,
– The more favourable regulatory environment for high-cost credit providers in the UK than elsewhere in Western Europe and North America,
– The increase in the supply of suitable sites resulting from the decline of the high street as a mainstream shopping destination.

However, in 2014 and 2015, the market has decreased in size following a fall in the gold price and the introduction of the Payday Loan Cap by the FCA.

Competitive landscape

The market has become relatively concentrated as a result of seven large chains having rolled out their store networks in recent years.

The following are the main companies in the sector.
– CNG Holdings, which operates both the Cheque Centres and Cash Generator high street chains as well as The Loan Store payday loans website, and which has recently closured some loss-making stores.
– Dollar Financial, which is based in the US, where it operates pawnbroking and lending stores, but now has a substantial share of its revenue from its UK operations, which are The Money Shop chain and the Payday UK and Payday Express loan brands.
– Cash Converters, an international pawnbroking franchise which started in Australia and moved to the UK in 1992.
– Albemarle and Bond which was recently acquired by Promethean Investments after the weakening market impacted its ability to service its debt.
– H&T, the UK’s largest traditional pawnbroking chain, which is listed on AIM.
– Ramsdens, the third-largest of the traditional pawnbroking chains, which was acquired by private equity firm, NorthEdge in 2014 and which has expanded both within and outside its base in the North-East.


In the last two years, the reversal in the gold price has led to a significant reduction in the levels of gold buying. Most analysts expect the price to fall further in 2015-2016, and our forecast assumes that gold buying decreases further as a result

Payday lending has also come under pressure with most of the leading chains withdrawing from the area or reducing their focus on it.

Traditional pawnbroking activity appears set to continue to grow at a steady rate, with less regulatory risk.

We expect the market to continue to fall further in 2015 as store closures take effect, before returning to growth, but at a more modest rate than in the period leading up to 2013.

Companies mentioned in the report

Instant Cash Loans
The Money Shop
Dollar Financial Corporation
Cash Generator
Cheque Centres
CNG Holdings
Axcess Financial
H & T Group
Albemarle and Bond
Cash Converters
Ramsdens Financial
SRC Transatlantic Limited
Speedy Cash

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