Discount White Gold Chains

Pawn shops expand in slow times

Inside, shoppers scour the aisles for jewelry, electronics, golf clubs and assorted power tools. Tuesday also is the day for the weekly DVD special: two for $5.

Donna Gains is picking out a diamond ring from the glass-enclosed jewelry counter. It's a gift from her son, Dace Lumpkin.

"It's my 49th birthday," Gains said.

Gains and Lumpkin are regulars at the store. "They're one of my original customers," said sales clerk Michael White.

"We come here all the time for electronics and jewelry," said Lumpkin. "This is the best place to find TVs."

Pawn shops such as Pawn America, with 22 locations in four states, are attempting to go mainstream in the world of retail.

Although the image still suffers from the stereotype of seedy stores in seedy neighborhoods with down-on-their-luck customers, the new breed of pawn stores has a more modern footprint with uniformed employees and an upbeat welcome to shoppers as they walk in the door.

Pawn America expects to do $63 million in sales this year, up from $57 million in 2010 and $47 million in 2009.

"Our success is our branding," said owner Brad Rixmann. "Even when the economy is booming, our business is still growing. Pawn stores intrigue people. We have a lot of repeat business because people never know what will be on sale the next day."

Max It Pawn, another Minnesota-based chain of pawn shops, has nine stores in the Twin Cities area and one in St. Cloud.

Max It's 11th store is being built as part of a destination development in St. Paul's East Side that includes a Chipotle, Starbucks, Dairy Queen, Cowboy Jack's restaurant and an Honest Auto shop.

Retail experts acknowledge that the new breed of pawn shops is making a dent in the retail landscape, albeit a small one, particularly in a challenged economy where consumers are cautious in their spending habits.

"They've been very opportunistic from a timing standpoint," said Dave Brennan, co-chairman of the Institute for Retailing Excellence at the University of St. Thomas. "They've taken the concept of a non-bank bank and expanded it into a value-and-discount retail operation."

Traditionally, pawn shops provide customers money, in the form of a short-term loan or cash - in exchange for goods. In the case of a loan, the collateral is generally held 60 to 120 days before it hits the floor if the loan is not repaid.

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