Walk into the Suttons & Robertsons showroom on the East Side of Manhattan and it looks like any high-end retailer or auction house: necklaces glittering with diamonds, sapphires and emeralds fill the display cases, and sterling silver knives, forks and spoons sit on a wooden table fit for a monarch.
High on the wall is a royal-looking coat of arms bearing the likenesses of two lions, with the date of the company’s founding underneath: 1770. Only on closer inspection does it become clear that between the lions are three balls dangling from a hook — the international symbol for a pawnbroker.
Far from the crusty characters seen in reality shows like “Hardcore Pawn” and “Pawn Stars,” this English company has another clientele in mind.
“We focus on the blue-chip, wealthy crowd,” said Jeffrey Weiss, chief executive of Suttons & Robertsons, which is preparing to open its first New York store this month.
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With almost 250 years of experience in the exclusive world of high-end pawn, Suttons & Robertsons has come to the United States to fill what it says is a growing need among wealthy Americans who have spent beyond their means and need a quick — and quiet — infusion of cash in exchange for a few cherished baubles they are willing, at least temporarily, to live without.
“There are more and more people who are asset rich and have a temporary liquidity problem,” said Weiss, who at 70 retains the soft Brooklyn accent of his youth. “They’re cash constrained. We have the capital to lend up to and beyond $1 million.”
Suttons & Robertsons is not alone in the high-value niche of the pawn business.
Websites like Pawngo and Borro sprang up after the financial crash, offering to lend against jewelry, watches and pretty much any expensive item that could be shipped via FedEx.
Other sites like Ultrapawn and iPawn came later with the idea of making larger loans, secured by fancy cars, art and gems. Recently, the Beverly Loan Co., a Beverly Hills, Calif., pawnshop that has been family owned since 1938, opened a second location called the New York Loan Co. in Manhattan’s diamond district.
For those who borrow a couple of thousand dollars against, say, a Rolex watch — which seems to be one of the most popular items to pawn — the rates range from 12 percent to more than 60 percent on an annualized basis for online pawnshops and into triple digits for brick-and-mortar operations throughout the country.
The new wave of pawnbrokers, or collateralized lenders, as they like to be known, isn’t just betting that people will pledge cars, planes, or, in the case of one Ultrapawn customer, an earth mover. They are also betting that as long as traditional bank lending remains tight for individuals, there will be repeat customers.
George Souri, a principal at the Atria Group, a private equity firm that invested in Ultrapawn, said his group looked at affluent people as if they were little companies. “When a business needs liquidity to fund operations or growth, they’re able to go to the capital markets and use business assets to obtain loans,” he said. “The high-end consumer does not have that option. And most consumers in that bracket wouldn’t be caught dead in a pawnshop.”
Souri said he had a client with homes in Chicago and Marco Island, Fla., and a Bentley Continental GT for both locations. The client pledged one of the cars, which are worth $250,000 each, to buy a boat for his Marco Island home because he was confident that the cash flow from his other investments would pay off the loan.
In other cases, people simply have too much money locked up in luxury items and not enough cash to pay for things like private school fees or divorce proceedings, both popular uses of high-end pawn loans.
The high-end portion of the industry is betting that with comparatively lower pawn rates and an ability to fulfill even large loan requests in a day or two, it will be able to build its business on happy repeat customers. Paul Aitken, founder and chief executive of Borro, said he attributed repeat business to the human desire to spend today without thinking about tomorrow.
“Entrepreneurial people like to do things on the spur of the moment, and they’re probably not the best planners,” he said. “When they have money in their pocket, they like to buy luxury goods. When they don’t, they like to use those goods to get money for their next venture.”
And that is how he ends up taking a Mercedes McLaren in as collateral for a loan.