At Gold Standard, upmarket items are perfect collateral
A clutch of Louis Vuitton handbags will soon be a financial lifesaver for cash-strapped fashionistas.
For gold-buying firm Gold Standard is to expand its business — offering short term loans against designer gear, high-end watches and iPads.
Gold Standard partner Matt Mello said: “We're concentrating on established brands that have a certain cachet and prevalence in Bermuda, like Louis Vuitton handbags, but we're also prepared to consider other higher-end niche brands also.”
He added: “I do want to stress that we're not currently purchasing these items outright, but we can hopefully help people use them to get cash when the need arises.”
Mr Mello said: “We started the collateral loan service to meet the needs of customers who had precious metal items that we regularly purchase, but who only really needed a bridge to get them through a short-term financial need.
“This service has proved to be very popular — so much so that we've been fielding many enquiries about accepting other items as collateral.
“Our primary consideration was to include items that — like jewellery — tended to hold a reasonable store of value over time.
“Also, like jewellery, we anticipated that people would be most interested in using items that they only used on rare occasions or had more than one of in their homes.”
Mr Mello said the new service, scheduled to start on Monday, was being introduced gradually, due to the need to accurately value designer kit.
Mr Mello added: “There are substantially more variables even within specific brands — such as Rolex watches — let alone within an entirely new category like designer bags, so we've made the necessary preparations to ensure that we are adequately prepared to provide this service to our customers.”
Gold Standard, in Washington Mall in Hamilton, was set up in 2011 to cash in on a boom in precious metal prices and allow people to sell of unwanted gold, silver and platinum jewellery.
Mr Mello said: “While gold in particular has received a lot of negative press this year, we're actually starting to see some metal prices climb, which has allowed us to increase our recent offers for both purchases and loans.
“It's impossible to predict what will happen going forward, but rather than risk another drop, many of our customers are choosing to unlock this additional value when they can.”
The pawnshop-style arrangement focusing on designer accessories is thought to have started in Hong Kong, where mortgage brokerage Lady Finance started offering loans of up to 50 percent of a designer handbag's value, giving customers four months to repay at an interest rate of four percent.
If the loan is not repaid, goods are sold on by the company at one of its chain of second-hand designer stores.