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Although the industry has grown considerably,
the dominant segment, estimated to be 94
percent, remains in the control of individuals
who own fewer than three stores and in most
cases are single store owners. Smaller
operators tend to loan less “per item” than
larger chains with greater cash resources. With
the borrower interested in maximizing their loan
amount, the small store owner is in jeopardy of
losing their customer base. This has become an
increasing problem for undercapitalized store
owners.
Since March 2000 POC, Pawnshop Operating Company, LLC., has focused on the
acquisition of existing pawn stores and currently owns stores in Florida and
Texas. Acquisition targets are stores that have not achieved their maximum
earnings potential and are therefore undervalued in the market. Undervalued
stores are usually the result of the store owner's inability to compete with the
lending practices of the larger chain stores or a lack of sophistication with
respect to the pawn business. Once acquired, the stores undergo modifications
designed to increase lending capacity and maximize earnings. Inventory levels
are adjusted and store interiors are updated to provide a well-lit, "mainstream"
retail environment while management systems are introduced to provide effective
oversight and control. |
