Street Level Commodities Traders - The Golds - Hardcore Pawn - Zing Talk

Les, Ashley, and Seth Gold are the owners of American Jewelry and Loan and are the stars of trueTV's Hardcore Pawn.

They were nice enough to grant Benzinga an interview.

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Could you start off by telling us a little bit about American Jewelry and Loan?

Les: Our 50 thousand square food facility that is located in the City of Detroit, just off of 8 mile road. This location has been in business since 1993.

What separates your company from other pawn shops out there?

Seth: We do our own thing; we don’t really worry about what the competition is doing. We run a store employs 45 people and deals with about 1000 customers a day.

Many companies in your space have gone public, like Cash America CSH for example. Do you have any aspirations to do this?

Les: No, we are a privately held company. We have launched a company called PawnDetroit.com. The website allows people to send us pictures and give us descriptions of their merchandise. We quote them a price and direct them to an affiliate of ours in their area to receive payment.

So how does your team judge the value of goods that don’t really have a “book price?”

Seth: Simply put, supply and demand. If we can move a product quickly, we pay a premium price for it. That’s how we run our day to day operation.

Obviously, the economic crisis has produced a credit crunch that has left banks unwilling to loan to even those with the best credit. What has happened to your loan volumes since the recession began?

Les: Well, because people need money, our business has gone up. We have probably increased our incoming loan business by 10 percent. This also means that on our retail business, selling prices have gone down. We are selling more items, but at price points that have been further discounted than normal.

Why is that?

Ashley: Because you don’t need credit. It doesn’t matter if you have good credit or bad credit. As long as you have a piece of merchandise to pawn or sell we will be able to help you.

I just got a comment from a listener that says that last night you guys bought a horse. Do you still have it?

Les: We do. It’s in a stable right now though, not in our actual facility.

How did you obtain the horse?

Les: Well, somebody came in and wanted to sell it, and Ashley wanted to buy it. We wrote him up on a purchase ticket and we were there recently riding the horse.

So last night in the first two episodes you were teasing Ashley about her negotiating skills, has she improved?

Ashley: I'm a good negotiator, no matter what they say.

Seth: And we re-enforce that through positive thinking. So yes, she is a good negotiator.

What do viewers have to look forward to in the next couple of episodes?

Les: They have a lot of excitement to look forward to. The series really shows exactly what the pawn shop does. It’s a fast paced, hectic reality show that shows our family dynamics.

Ashley: We have customers selling everything that you won’t normally see at any other pawn shops, or even on TV anywhere.

This is another question brought in by a listener. In the show last night it looked like you guys had a tough time buying guns. Was the family that came in ever able to get them, and did you find out why the person had such a hard time with selling you his guns?

Les: The person had a problem because he didn’t want to discount an $80 holster. We had already made a deal before he came over and from there it just went south. I don’t know what his reasoning was but there was no reason for him to act or react the way he did. If it was somebody coming into our store; whether they were spending $10 or $10,000, they would get the respect they deserved. That’s not the way we were treated in there.

Why do you think TruTV chose your shop?

Les: We are a unique family run pawn shop and pawn shops create a lot of interest. When people see that we are a fourth generation pawn brokibng family, it creates an interesting dynamic that people are fascinated with. The fact that my sister and I don’t always get along makes it that much more interesting.

There’s been a lot of talk this summer about clamping down on payday lenders and pawn shops as a way to curb risk in the financial system. What are your thoughts on this?

Les: We are regulated by state law in Michigan. We have the lowest interest rate around. You go somewhere like Georgia and they’re charging 20% interest a month where we’re charging 3%. The answer in regards to Michigan is that the crackdown the U.S. government is talking about will regulate other states to the point we’re at already, so we have no feeling either way. Pawn shops are important to people these days and hopefully the show will reflect that.

How do you think the new regulations will affect your business?

Les: We’re already used to those rates; it’ll be something we can live with because it’s something we already do. I don’t think they’ll end up being as stringent as they were originally talking.

Okay, now I’m sure you’ve had people bring in some interesting things in to try and use as collateral or sell. What is the strangest item someone’s brought in?

Ashley: It was actually on the show. I had a gentleman standing at the jewelry counter so I was thinking he was going to try to pawn an earring. When I walked over there he took his prosthetic leg off and plopped it right on top of the showcase and I was actually able to pawn it for him.

What was your first, and what was your worst job?

Les: My first job was in 1957. I was seven years old and sold a hydraulic jack at my grandfather’s pawn shop. That was my official entry into the pawn broking industry. The worst job was definitely cleaning toilets at the same location, but I did it and it made me who I am today. I had my kids do the same thing when they were first getting their start in the business. Unless you start at the ground and work your way up, you’ll never be able to fully understand what’s going on.

Seth did you appreciate having to scrub the toilets when you were younger?

Seth: It’s a learning experience; there is an inherent respect that you get being the owner’s kids but that wears thin quickly. If you’re not willing to do everything that everyone else is doing then you’re never going to earn any respect so it was no big deal for me.

What do you like to do when you’re not working at American Jewelry and Loan?

Ashley: I enjoy spending time with my kids and husband and I love traveling and working out, but being in the store is what I love.

What is your favorite restaurant that you’ve ever been to?

Seth: There’s a good sushi joint by my house that I like to frequent quite a bit.

Okay, this last one is Benzinga’s trademark question: What was the best, and what was the worst investment decision you’ve ever made?

Les: The best was to buy a bowling alley that we turned into a 50,000 square foot pawn shop; that was the best thing I could’ve ever done. As far as the worst investment, I was a commodity trader with my father in law and per his advice, I bought 7 trailers of cattle, which is 40,000 pounds; it went down to limit for a week straight and I couldn’t move it. That was absolutely the worst deal I ever made.

Did you learn a lot from the commodities business that has helped in the pawning business?

Les: We move a lot of metals these days, so essentially we are commodity dealers at the street level. So whether it’s diamonds as a commodity or electronics as a commodity, we are commodity dealers every single day.