Inside The Secretive World Of Luxury Pawnbrokers
If you walked past Suttons and Robertsons' South Kensington branch, it's unlikely you'd think there were luxury goods worth thousands of pounds locked inside.
In fact, its fluorescent lights and carpet are more akin to a high street bank than a luxury pawnbroker, where you can only enter by appointment.
But, in recent times, it has loaned £47,000 on a piece of Banksy art after a customer was landed a surprise tax bill - and £315,000 on a collection of high-end watches in order to fund a hospitality business buy.
Suttons and Robertsons has been a luxury pawnbroker since the 18th century
The origins of pawnbroking can be traced back thousands of years and it is one of the oldest forms of lending in the world.
Now, it is having somewhat of a resurgence after the pandemic flipped the industry on its head.
As more people struggle to access finance they are turning to pawnbroking, but what of the more secretive luxury market?
It has been pushed - or dragged, depending on who you ask - into the 21st century.
For Suttons and Robertsons, which has served its customers in one form or another since 1770, the change is welcome.
We spent a day at the premises with managing director Jim Tannahill to discuss how and why the demand for luxury pawnbroking has grown.
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Demand for pawnbroking grows
In some areas, pawnbrokers can be quite visible but the numbers of actual shops actually remain relatively low.
That said the largest pawnbroker in the UK, H&T Group which has 270+ stores in the UK, reported 'record levels' of demand last summer.
Its pledge book - the loans against customer assets - rose from £85.1million to £114.6million over the year.
Suttons and Robertsons had a similar increase in business with its loan book up between 20 and 30 per cent year-on-year. It has also seen the number of first-time customers climb by 30 per cent since this time last year.
Suttons and Robertsons' managing director Jim Tannahill has been a pawnbroker for 40+ years
'We do get a good suite of new customers, but like the rest of the industry we are reliant on the fact that once people have been using our service they do repeat,' says Tannahill.
'Probably 50 per cent of anyone's book will be repeat clients and then you top that up with new clients. Some just borrow once.'
Tannahill started his career at TM Sutton and worked there for a number of years before starting out on his own.
In 2019, Hopkins and Jones acquired all of the trading assets from Suttons and Robertsons, which was owned by The Money Shop, and he is now one of the shareholders.
'I'm still seeing some of the same faces that I used to see before I left, which was about 10 years ago. I think if that's still happening your service must be of use to people.'
The lack of access to loans, especially since the collapse of online payday loans no credit check lenders, means it still serves a purpose, he argues.
'If you want a mid-thousands pound loan, its difficult. Getting mainstream quick access to that sort of finance is increasingly difficult. The anti-money laundering side of things is a bit more long-winded, but if you wanted £10,000 from a bank it's just not happening in a day.
'If you're looking to borrow money over a short period of time, [pawnbroking] is a viable and quick option.'
How does luxury pawnbroking work?
Unlike non-luxury pawnbrokers, Suttons and Robertsons offers loans secured against luxury items, such as watches and jewellery.
It can also buy items but the vast majority of its business is in loans, and it is fully regulated by the Financial Conduct Authority (FCA).
The asset is valued and an offer will be made, at which point the customer enters into a pawnbroking loan agreement. Pawnbrokers will work on cash value and will lend a percentage of that, usually between 75 and 80 per cent.
Suttons and Robertsons will hold the asset in one of its secured vaults until the agreed period of time - usually six months - is over, although you can return at any time within this time.
Once the full loan amount and accrued interest is paid, the item will be returned to the customer.
Not everyone can walk in and get a pawnbroking loan though. At Suttons and Robertsons, the minimum loan is £500 - higher than the £400 average loan paid out by other pawnbrokers - while the average loan size is £6,000.
Tannahill says he has loaned up to half a million pounds, and the average loan size is rising in part because of prices going up in general.
Popular pawned products include fine jewellery from leading brands like Tiffany & Co
'What was a couple of thousands of pounds a few years ago is double that now… just by the very nature of the product.'
Pawnbrokers will also carry out rudimentary checks and in the luxury world, proof of purchase and/or insurance valuations on the item, which helps establish a tie between the customer and the item.
'Some customers push back against these things because they think we're prying. I'd much rather we didn't have to, but you've got to do what you've got to do. Times have changed.'
Knock-off items might be getting better and better but information is easy to get which means most people will have ID, he says.
There are lots of fakes out there... you really are up against it with some of them.
While the internet has meant a proliferation of the black market and fakes market, it has also helped the pawnbrokers themselves.
'There's a lot of information on the internet. You can look up watches, serial numbers, the brands and auctions. You can get a feel for what something might be selling on the secondhand market.'
But improved fakes means it is hard to ignore which makes the process more frustrating.
'You still took look, touch, feel and do your own due diligence - especially with watches. There are lots and lots of fakes out there and we see them all the time.
'A lot of them are rubbish which is good for us. Once you've seen the real product you notice the quality difference. But some of them are very good… you really are up against it with some of them.
'For every Cartier Love bangle I see, there'll be three or four that are fake to a relatively good standard. They'll be gold, they'll have the marks, but they won't be from Cartier. It's a real headache.'
The secondhand watch market has exploded in recent years but it also means a lot of fakes have flooded the market
What do people take to luxury pawnbrokers?
Over four decades, Tannahill has been up close and personal with a lot of expensive items, but it's the most rare that he enthuses over the most.
'I've seen lots of Victorian items which probably aren't worth much but are rare. I remember seeing a surgeons kit with a saw for taking off a log. It was mounted in gold and bone-handed.'
The most pawned items in 2023 are less ghoulish: gold, watches and branded jewellery are all split fairly evenly. Watches have particularly taken off because of the secondhand market, and prove particularly popular in Suttons and Robertsons' City branch.
The pawnbroker operates across four outlets in London, each one catering for the area in which they're situated.
'They're all very different. The City will be more watches, South Kensington more jewellery. Our Edgware Road location happens to have lower average loans, although higher than the industry, and that's a little more unusual jewellery and gold based.
Quite a lot of people have the perception that an item will increase in price. It might do over a period of time. It's certainly not instantaneous.
'Victoria is a mixture of both. If silver popped up it probably came from Victoria.'
But what people take into Sutton and Robertsons has changed massively since Tannahill started forty years ago.
'I started in Victoria and we'd have a lot of clients bring silver in. They'd bring in the family silver in trunks and we'd have lots of lords and ladies. That's all changed, people don't want silver anymore. Old English silver isn't the thing it was.'
He's also seen demand for Victorian jewellery peter out with a move into branded jewellery from the likes of Cartier.
There does seem to be more people who think there is more value in their items, which can lead to some 'awkward' conversations, says Tannahill.
'That's probably one of the most common and awkward conversations you have at first - what you lend against and what someone believes it's worth. Quite a lot of people have the perception that if you bought it in a retailer, it will increase in price.
'It might do over a period of time, it might not. It's certainly not instantaneous.'
Small business owners turn to pawnbroking
The cost of living crisis has pushed more people into pawning their items, according to industry leaders. But the people who use luxury pawnbrokers are more often than not insulated from the worst of the downturn.
'In the last few years there has been a dramatic rollercoaster. We purchased the businesses in December 2019 and the loan book almost halved in about a year because of the pandemic. People had more money than they'd had before, swathes of the book were paid back.'
From that point, the firm doubled its loan book but it came from a low starting point. It has been on a steady upward trajectory since then, rather than a boom in business as seen in lower-end pawnbrokers.
Asked if he's seen a different type of customer due to cash flow issues, Tannahill said: 'Pretty much anyone that walks through the door has got a cash flow issue at that point in time.
'There's holidays, school fees, weddings, all of a sudden you need a big lump of money.'
Beyond short-term liquidity for personal reasons, small businesses are increasingly turning to pawnbroking too.
'At the end of every given month, you've got salaries to pay. At the end of the quarter you've got VAT. You've also got suppliers to pay.'
One small business owner and part-time property developer faced an unexpected tax bill due on 31 January. Suttons and Robertsons loaned them £47,000 on a Banksy piece, which took just 2 days to complete.
Another businessman pledged their watch collection, which included a Rolex and Patek Philippe, for £315,000 to buy a hospitality business.
Suttons and Robertsons say 90 per cent of its online payday loans no credit check are made to customers with an income of £100,000+ per year, and 75 per cent are in the top 5 per cent in terms of affluence.
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