Looks Count At National Pawn

July 18, 2011 - PRLog -- Bob Moulton, the owner of a regional chain of pawn shops, realizes some people will never patronize his stores no matter how good they look.

So last year, when he opened his seventh National Pawn store on Raleigh's Capital Boulevard, he also opened a jewelry store next door that sells pre-owned watches, rings and other bling.

The store, which also sells brand-new items, is called National Fine Jewelers.

"We're trying to take the word pawn out of it," said Moulton, 49.

But while it doesn't bill itself as a pawn shop, customers can go to the store's office for what Moulton calls an "executive loan."

It's a sales strategy that cuts against the grain for Moulton, who opened his first pawn shop in Durham in 1987 and who declares: "My business mission is to dispel the unfair stereotypes and myths of the pawn business. ... Through TV and movies, we have been portrayed in a less-than-favorable light."

That's why Moulton has focused for years on the appearance of his stores. In 2003, he spent about $500,000 to revamp the interiors of the six stores he had at the time. He invested more than $2 million in the side-by-side National Pawn and National Fine Jewelers.

The pawn store would fit right in at any local shopping center, with its more than 80 acoustic and electric guitars hanging on one wall and shelves filled with wide-screen TVs - all of which are turned on and hooked up to cable. The jewelry store has original modern art hanging on the walls, overstuffed chairs for weary shoppers and display cases showcasing, among other things, about 30 pre-owned Rolex watches that start at $2,000.

Moulton decided to invest in the expansion because he couldn't resist the real estate deal - "it was a nice piece of property"- but the ailing economy has hurt profit margins. Moulton said he's not planning any further expansions for now.
"People think we do good in a bad economy. That's not true," Moulton said. "Some of the best times we have had is when Clinton was in office."

Lending and selling
The pawn industry has a split personality - its interaction with customers includes buying/loaning and selling - and that's both a plus and a minus in today's struggling economy.

Loan demand and average loan amounts are rising, but retail sales are soft. Merchandise sitting on the shelves can tie up a shop's cash.

"The core of the business are the loans," said Emmett Murphy, spokesman for the National Pawnbrokers Association. "But they need cash to make loans. If you remove one part of the equation, it starts to tilt."

The lopsided situation has forced some pawn shops out of business, although the Pawnbrokers Association doesn't have numbers.

Moulton said his overall revenue is up because of the opening of his two Capital Boulevard shops, but revenue on a store-by-store basis has been down or flat the last two years. He said last year's revenue was roughly $7 million.

Victoria Ingram, 30, a customer service representative who lives in Raleigh, shops at the National Pawn store on Capital Boulevard every few months along with her husband, Ishma.

Among the items they've bought: two TVs and a laptop computer.
"If I'm looking for something in particular, I like to come here first before I pay retail prices," Ingram said while browsing at the store recently.

It's a family business
The pawn industry consists of about 10,000 shops nationwide. There are a few large, publicly traded pawn shop companies - none of which have operations in the Triangle - but the bulk of the industry consists of mom-and-pop stores, Murphy said. In that context, National Pawn is a midsize chain.

National Pawn's average loan amount has been on the rise and hovers around $100, although Moulton has made loans as high as $20,000 - the collateral was a 4-carat diamond - and regularly makes loans to small business owners who need to make their payroll. About seven out of 10 customers pay back their loans, although that number has declined with the sour economy.

"I have seen it as low as 65 percent in certain months," Moulton said.

Pawnbroking is in Moulton's blood. The Durham native had an uncle who owned a pawn shop where his mother worked and, after the uncle sold the business, his mother opened a shop of her own.

Moulton started out working for her and, after a few years, opened his first shop.

From the beginning, he was fascinated by the vast array of products that walk in and out of his stores.

"I think our sales would be a whole lot higher if people would just come in the store and see what we have," Moulton said. "A lot of people I talk to have never been in a pawn store."

By David Ranii - Staff Writer
david.ranii@newsobserver.com or 919-829-4877

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