CASH-strapped pawnbroker Albemarle & Bond’s bid to secure a rescue deal has been dealt a blow after a potential buyer walked away.
Albemarle said it was still in talks with a number of other interested parties following the withdrawal of corporate turnaround firm Better Capital, whose investments include parcel delivery firm City Link and fashion business Jaeger.
The pawnbroker put itself up for sale in early December after its trading was hit by a slump in gold prices and rising competition in a sector that has more than doubled in size over the past five years.
It has been trading at a loss in recent months and is in danger of breaching financial covenants. It is looking to secure its future before the end of a three-month reprieve from its lenders at the start of February.
Rival chain H&T is understood to be one of a number of trade and financial buyers that have formally lodged interest in buying Albemarle.
Albemarle, which also trades as Herbert Brown, has reduced the size of its estate to under 200 sites, having closed its pop-up gold buying stores. It said: “The board of Albemarle & Bond understands that Better Capital has withdrawn its interest in the company’s formal sales process.
“The board confirms that the formal sales process is ongoing and that it is continuing discussions with a number of interested parties.”
The company recently revealed that measures taken to remain within its £53.5m borrowing limit included a clampdown on lending through its Speedloan and online arm, as well as a “programme of exceptional smelting” of gold items bought by its stores.
It has also seen a mass exodus of board directors, with five of its six non-executives recently quitting with immediate effect – leaving chairman and former chief executive Greville Nicholls as the only remaining non-executive at the pawnbroker.
Earlier this month, Albemarle & Bond warned that there were “no signs of recovery” in its markets and it blamed a sharp drop in annual profits on a 27 per cent slump in gold prices over the past nine months.
Gold is usually seen as a safe haven in times of economic hardship or uncertainty, which prompted a rapid rise in prices during the recession. However, a rise in consumer confidence, particularly in the US, means stocks and shares have become more popular.
At the same time, the possibility of rising interest rates has made savings a better proposition, causing gold prices to plunge.
The group has 24 branches in Yorkshire. Leeds-based Herbert Brown was established in 1840, with shops at Christopher Street and Burley Road in Leeds.
It was bought by Albemarle & Bond in 2007, in a move which created one of the largest pawnbroking jewellers in the country.