From a small pawn loan of US$200 to a platinum bag of US$30,000: Chain pawn shops witness the K-shaped differentiated economy

From a small pawn loan of US$200 to a platinum bag of US$30,000: Chain pawn shops witness the K-shaped differentiated economy.

The rising cost of household living has created a demand for small cash loans, and stores have also welcomed a large number of wealthy customers looking for second-hand luxury goods. Ezcorp operates two major chain brands: Ez Pawn and Max Luxury Pawn.

Eads Group chief financial officer says pawn loans have surged among cash-strapped people In a Max luxury pawn shop next to the Las Vegas Strip, the glass display cases are filled with second-hand goods. The Birkin bag attracted a customer who came from Texas to buy luxury goods.

At the Eads Pawn Shop near the airport on the other side of the city, local Nevada residents only borrowed $200 in pawn loans to pay various bills. The Yiz Group owns two major chain brands, Max Luxury Pawn and Yiz Pawn, which have long been a barometer of people’s financial pressure.

Recently, the current operating status of this company has accurately confirmed what economists said : The rising prices of various commodities such as food and gasoline continue to widen the gap between the rich and the poor, and American consumers are showing two completely different consumption trajectories.

Tim Jugmans, chief financial officer of Eads Group, said: "People's current demand for cash is obviously more urgent than a year ago.

Many people have reported that they cannot meet the application conditions for ordinary consumer loans, and pawns have become a more suitable method of cash flow to help them relieve financial pressure." On one side, there are ordinary people who are in urgent need of cash flow, and on the other side, consumers with affluent finances come to buy affordable high-end luxury goods.

Izzy's luxury stores even attract cross-state buyers to make a special trip to the store. 1. Ordinary consumer groups under financial pressure Food, housing, and fuel prices continue to remain high, and living expenses continue to expand.

More and more Americans are choosing IZP Pawn: they can apply for small pawn loans without needing a credit check or providing proof of employment, or buy second-hand goods at low prices.

In the first quarter ended March 31, the total number of Eads pawn loans soared 33% year-on-year to a record high of $349 million; the size of domestic loans in the United States increased 16% year-on-year, and the average loan amount rose to $240, an increase of 16%.

The pawn business often thrives when household budgets are tightened: people short of money sell their spare time for cash, and customers looking for value for money hunt for bargains. Eads Group, which has more than 600 stores in the continental United States and Puerto Rico, is also benefiting from this trend.

On a recent afternoon, the Eads Pawn Shop next to the Las Vegas Airport was filled with a wide variety of goods, including musical instruments, bicycles, second-hand Louis Vuitton bags, Sneakers are all available. There is an endless stream of customers, and many regular customers can call the clerk by name.

Some people browse electronic products and jewelry; others purchase Christmas and Valentine’s Day gifts in advance and choose installment storage services for up to 10 months to share the expenses.

Jerry Jory, vice president of the group's division, said: "Under the economic environment, customers use pawn shops as alternative consumption channels to live on a budget." In the first quarter as of March, the company's merchandise sales revenue increased 27% year-on-year to approximately US$214 million.

Customers can also apply for pawn loans at the store: Pawn shops accept personal items such as jewelry, electronic products, musical instruments, etc. as collateral to issue short-term cash loans. Borrowers only need a valid ID to get money, and there is no credit check.

Overdue repayment will not affect personal credit; if it is unable to redeem when it expires, the store will sell the collateral to recover the principal and interest of the loan.

Jory said that the continued rise in living expenses has led more people to rely on pawn loans to fill the financial gap before wages are paid: "When times are tough, people always have to find additional sources of funds.

For many customers, without a pawn shop, they can't even afford to drive." Analysts said the sharp increase in loans at the beginning of the year was particularly unusual. Kyle Joseph, an analyst at financial institution Stephens, explained: "Usually, people receive tax refunds in the first quarter, and the demand for pawn loans will fall.

However, this year it has bucked the trend and has surged." Pawn loans are not a free buffer. For 35% to 45% of pawn transactions at Eads stores, the customer is ultimately unable to repay and the collateral is disposed of by the pawnbroker.

Pawn shop interest rates across the United States vary greatly depending on local regulations: some states stipulate that the monthly interest rate cap does not exceed 5% (excluding additional handling fees), and some states can reach as high as 30%.

Nevada pawn shops offer monthly interest rates of up to 13%, plus a $5 initial processing fee and storage fees for some valuable items. In the first quarter of this year, Eads Group's total revenue increased 46% year-on-year to $447 million.

Joseph commented: "The price of everything is rising, which directly drives up the demand for pawn loans; at the same time, a large number of consumers are keen to buy affordable goods, and the pricing of second-hand goods in pawn shops is very attractive." 2.

Another type of consumer group: luxury goods buyers Various luxury bags displayed at Max Luxury Pawn Shop in Las Vegas Max's Luxury Pawn Shop next to the Las Vegas Strip is a completely different scene: the store is equipped with soft leather sofas, warm lighting, and free drinks, reflecting a completely different consumer class.

About 20 second-hand Birkin bags are displayed in a glass safe on one wall. The store is also filled with Chanel handbags, Rolex watches, Louis Vuitton and Gucci luxury shoes. Some second-hand Birkin bags are priced at more than $30,000.

The customer base attracted by the store is completely different from that of ordinary pawn shops: many customers come across state lines to buy luxury goods, few of them apply for installment storage, and few apply for pawn loans.

Some people save money to buy one luxury product at a time, but store manager Chris Jewell said: "Many customers have already stocked up on three, four, five Birkin bags and several Rolexes at home." In 2022, Izzy Group acquired the high-end pawn brand Max Luxury Pawn and officially laid out the high-end second-hand market.

The business is still small but continues to expand, with three stores in Las Vegas and a fourth opened in Miami last year. Chief Financial Officer Jugmans said that the group did not disclose luxury store revenue separately, nor did it set a target for the number of store expansions.

"The core goal at this stage is to make existing luxury stores stable and profitable.

We are still exploring whether this model can be replicated in other cities." The initial deployment of high-end second-hand business was because the market demand for second-hand luxury goods continued to rise, and all ordinary pawn shops under the group added special sections for selected affordable luxury goods.

Nowadays, low-income groups are cutting back on spending, but wealthy people still have sufficient confidence in consumption. Analysts believe that high-end pawn stores have accurately captured the more resilient consumption end of the economic divide.

Joseph, an analyst at Stephens, said: “The public image is that pawn shops only serve the bottom borrowers, but this company has just seized the business opportunities brought by the K-shaped economy.” Open a futures account on Sina's cooperative platform, safe, fast and guaranteed

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