Albemarle strikes gold with 'pop-up shops'

Albemarle said its performance continues to be strong, despite increased competition and a softening demand for gold jewellery.

The group's core pledge book has grown at around 10 per cent year-on-year and it expects full year results to be in line with market expectations.

Pawnbrokers have enjoyed record profits on the back of soaring gold prices, making it attractive to scrap second-hand items rather than sell them.

Albemarle, which plans to open an additional 25 stores in the next financial year, reported a 75 per cent lift in its first-half profit, while rival H&T Group posted a 70 per cent rise in full-year profit in March.

The group said its nine 'pop-up shops' have traded well and it is looking to open a further six gold buying stands by the end of the financial year.

Albemarle bought Leeds-based pawnbroker Herbert Brown in 2007. Herbert Brown has particular expertise in selling second-hand jewellery and Albemarle has retained the Herbert Brown brand. The group lends against jewellery, with the majority of its customers borrowing an average 120 and repaying within three months.

Albemarle is keen to step up its expansion plans and step into the gaps on the high street caused by the collapse of major players such as Woolworths, MFI and Rosebys.

High street pawnbrokers make money by advancing short-term loans secured against valuables, typically gold jewellery, pledged by the borrower.

They lend small cash sums in transactions that require no credit checks, providing a source of borrowing that has become increasingly popular as mainstream banks turn down more customers.

Herbert Brown was founded in Leeds in 1840. The company was originally a linen presser and outfitter, but the founder's son Charles Hood Brown switched trade to become a pawnbroker and jeweller.

UK pawnbrokers are unique in that the majority of the pawned belongings are items of gold jewellery, unlike the US and France where people pawn a wide (and sometimes bizarre) range of valuables including guns, fine wine and designer clothing.