Sitting on a gold mine
IT’S not just gold that is glittering for Ramsdens, the jewellery retailer whose successful moves into clickand-collect foreign exchange services, precious metal sales and pawnbroking have built a strong foundation for group expansion.
As trade picks up again after Covid, the hybrid store and online chain, which is listed on London’s secondary Alternative Investment Market (AIM), is forecasting a £66.9million turnover for next year.
While Ramsdens’ sales are an indicator of what’s happening at the grassroots and the outlook is challenging, “we’re more recession-proof,” explains chief executive Peter Kenyon.
“We don’t fly that high in good times and offer services that reach out in bad – it’s an important balance that can withstand fluctuations.
“Customers are travelling again and want foreign currency.
“The consequences of Russia’s invasion of Ukraine continues and gold is investors’ safe haven in uncertain times.
“The cost-of-living crisis has increased pressure on consumers and the focus on pawnbroking, which for us is about accessible finance from a regulated lender, not high cost short term credit.” For over a decade, Kenyon has driven growth through expansion of the shops estate across the UK after seeing gold price rises open up opportunities, acquisitions including 24 The Money Shop stores, a management buyout, then the FX services development and online gold buying.
Today the company has 153 stores with plans to open five more this year and for the “healthy pipeline” to continue in locations “where there’s not a gap, but a nucleus, with well-known brand neighbours and footfall,” he adds. Customers are from all walks of life, with more over-40s, some revealing a taste for premium watches. “Growth has been significant over the past 18 months,” says Kenyon. “Why now?
Perhaps because people couldn’t go on holiday and wanted to treat themselves. Rolex’s supply is limited and values appreciate. Part-exchange from customers wanting to trade up is on the rise.”
The group is aiming to add to its 670 head count by recruiting 80 more staff. Ramsdens “went early on increasing wages,” declares Kenyon. “Lower paid staff received a 12 per cent increase and those on a higher salary five per cent.
“The work in our stores is varied which keeps staff engaged.” It is also key to explaining to customers what Ramsdens offers.
“Our stores are umbrellas with different products and services,” he explains. “Customers come in for one thing, then return for another.”
After a pause, the group is now paying a dividend. “The current plan is to split profits between investors and growing the business,” adds Kenyon. “Then keep improving what we do, and if a consolidation opportunity crops up – great.”