Party line on a solid gold way to cash in assets

Stephen Pearson, who was the first commercial director of the Premier League before going on to run a sports and gaming marketing agency, set up PartyCash4Gold for the "middle class poor" who he said needed money but would not normally visit a pawnbroker's shop.

The firm puts on home events, similar to the domestic shopping parties which began in the US and spread to Britain, except they are for people who want to cash in on their unwanted gold rather than splash out on luxuries. Mr Pearson's firm buys the gold and melts it down before selling it off.

"We would like to become the gold party equivalent of Tupperware and Ann Summers parties. We operate a similar type of business."

The former Harrogate schoolboy set up his firm in January after a short spell working for a similar, American-based operation, when it launched in the UK. Now it is being launched in Yorkshire and Mr Pearson hopes to take on about 20 valuers per month.

He said he had seen a strong demand for the service in the south-east as the economic crisis prompted people, particularly women aged between 35 and 60, to realise some of their assets. Gold, which is traded on global markets alongside other commodities, has risen in price over the last two years and yesterday analysts said it was set to rise again in September on the back of demand from India.

Mr Pearson said some Britons still felt there was a "stigma" attached to visiting a pawnbroker but were happy to sell gold in their homes or those of friends.

Hostesses make their money from taking a 10 per cent commission of the total amount paid out by PartyCash4Gold, which is typically between 3,000 and 4,000, and can make an extra, smaller sum, known as

a referred commission, if guests go on to organise their own parties.

The firm also sends gold valuers to the parties. Their equipment includes an electronic gold testing device and a gel substance which detects the carat of the metal, and the valuers also weight the items.

The business has a margin of 10 to 12 per cent from each party and Mr Pearson said transparency has helped it to win new customers.

"It is not that huge but because we do it in volume it stacks up as a business. We show people the process and they understand that we are running a business and we need to make a margin. That is one reason why the whole business has really taken off."

Of course, investing in gold has traditionally increased in troubled times, as part of the "flight to safety", which raises the prospect that it could be harder for Mr Pearson to sell once the economy picks up.

He said he was confident, however, that a market would still exist, both in Britain and abroad.

"We have built for the next three or four years and we have a very strong business model.

"If the gold prices changes drastically that is a certain danger but I think people will always like to find money. We have just touched the surface in terms of where the business is at.

"We want to take it overseas – to France, Germany and Spain. We will look to take it very quickly."

The business buys about 1.8m to 2m of gold a year but Mr Pearson said they hope to double or triple this by year three.

The business also hopes to work with charities, who would receive higher rates of commission from hosting gold parties.

Sporting chances to win big deals

Stephen Pearson attended Harrogate Grammar School and was a chorister, with his twin brother, at the town's St Peter's Church. He went on to work at a London advertising agency before moving to Switzerland in 1993 to work for T.E.A.M Marketing, UEFA's marketing partner for the Champions League. During this time he brokered several international television and sponsorship deals, including one with Sony PlayStation worth more than 30m. He was appointed the first commercial director of the Premier League in 1998, working on deals with Visa, Nestle and McDonalds.

He went on to set up Sportacus in 2000, negotiating sponsorship such as Thomson Holidays' deal with Tottenham Hotspur. In 2005 he founded Sports Media Gaming, an agency working across three industries, and this is in abeyance at the moment to allow Mr Pearson to concentrate in PartyCash4Gold, but he can return to it in future, he said.

He also launched the world's first $1m backgammon tournament in the Bahamas in 2007.