Update: Since this was written it has been announced that the Albermarle & Bond “pledge books” have been bought by rival H&T for £8m.
The credit industry is a fast-changing place these days and there have been some high profile closures and exits from the market in recent years. In September, pawnbroker Albemarle & Bond became one of the latest names to be cast under a shadow as it abruptly ceased trading and shut all of its stores. Customers were unable to access their pawned items and were fearful that they would never be able to recover them.
What happened to Albemarle & Bond?
Speedloan Finance, which owns Albemarle & Bond, stated that the 116 stores in the group have been closed because the group has run up significant losses. At the end of 2018, Speedloan Finance reported a drop in revenue from £38m to £34m and an increase in pre tax losses from £1.9m to £3.3m. The ultimate owner of all these businesses is Daikokuya Holding, a Japanese company with a pawnbroking business that is listed on the Japanese Stock Exchange. This is not the first time that Albemarle & Bond has come close to closing – it almost went into administration in 2014 but was saved at the last minute.
What about the business’ customers?
For anyone who has a pawnbroking agreement with Albemarle & Bond, the company has stated that they will still be expected to adhere to the terms of the agreement or will risk the items pawned being sold on when the agreement comes to an end. This is effectively what would happen anyway under a pawnbroking agreement and is not affected by the organisation’s own financial troubles. However, many customers who were hoping to redeem their items once the money was repaid are now concerned about how they will access them now that the high street stores are closed and all the items seem to have disappeared. There are fears over whether personal items are safe and also how they can be retrieved. The contact number provided by the business is either overwhelmed or simply not working and many customers have stated that they are “terrified” about where their items could end up. Recent newspaper reports have featured customers quoted as having secretly pawned items that were gifts from friends or close loved ones as a result of financial hardship who now face having to own up to what they’ve done if they aren’t able to retrieve the items.
Does the business have a future?
According to Speedloan Finance all options are being explored in terms of trying to find a way to enable Albemarle & Bond to have a future in the lending industry. This could include finding a buyer for the business and making cuts. Speedloan has said that it is consulting with Albemarle & Bond employees and that many have been offered voluntary redundancy. There has been plenty of criticism of the way that the crisis has been handled by the business, including from the National Pawnbrokers Association. It released a statement indicating that the operational decisions of the business were its own concern but the way that it was handling customers was not good enough in terms of the standards that are expected from companies in the industry. It said,
“In particular, we are most unhappy with the fact that customers cannot get through to the helpline. We have demanded that the management of the company resolve this as a matter of urgency.”
Pawnbroking and its customers
One of the biggest concerns with the closure of these stores is the reduction in access to credit that it will present to a wide range of people in the affected areas. Pawnbrokers allow borrowers to provide something valuable – such as a watch or a piece of jewellery – as security for a loan. That security is then returned to the customer once the loan has been repaid. Many of those who use pawnbroking don’t have access to other forms of credit and could struggle to get approved for a loan with a high street bank. They may not be able to use online lending or simply prefer to deal with a local high street store. The issue now is what happens to those people who no longer have access to borrowing as a result of these closures.
Albemarle & Bond has been pulled back from the brink in the past and could well live to fight another day. However, for its customers, the lack of communication and worries over the future of their valuables remain a worrying concern.