If you ask any seasoned pawn professional what thing has had the most impact on the pawn industry in recent history, they’ll most likely tell you that it was the listing of the three pawn giants on the New York Stock Exchange in the early 1990s.
Ever since the three major pawn companies, Cash America, First Cash, and EZCorp, began taking on public investors in the 1980s, the three pawn giants have been competing to gain the biggest share of their market by buying up independent pawn shops across the US and abroad. Since it is more profitable for these giants to invest time, money, and resources into purchasing pawn businesses that are made up of multiple shops, multi-store pawn businesses in the have been getting scooped up at a fairly steady and rapid rate for more than three decades. As a result, there are now relatively few US-based multi-store pawn businesses left for the major pawn companies to purchase.
Sellers Beware
If you are the owner of a multi-store pawn business, you may have already been approached by one or more of the major pawn companies and presented with offers to buy.
If you are currently considering an offer or thinking of selling, perhaps the biggest mistake you could make is thinking that because you are in a position of power due to the current market landscape, all you need to do is pit one or more buyers against the other in order to close at the highest possible dollar amount you are capable of achieving. Why? It’s just not true.
The major pawn companies are trying harder than ever to not only buy valuable independent businesses quickly, but to gain as many advantages as they can during the buying process in order to make their investments as worthwhile as possible. Make no mistake: The major pawn companies are not throwing their monies around; they are doing everything they can to buy up the majority of the market strategically. As the powerhouses of the pawn industry, they are using all of their resources to make potential acquisitions as profitable as possible. In other words, when it comes to closings, they’re not going to do you any favors, and they’re not going to give you what you want simply because there are other buyers in the mix.
Sellers Relax
The good news is that you don’t have to through the selling process alone, and you don’t have to accept the best offer on the table blindly.
One of the main reasons Stallcup Group has had so much success in the pawn exit strategy consulting business is that its leaders have an advanced view of what is going on in the market. They understand the tactics that the major pawn companies employ in an effort to avoid paying what an independent pawn business is actually worth, and have put in the time required to develop strategies that keep the ball in the seller’s court.
Enough time has passed since the major pawn companies appeared on the New York Stock Exchange for a considerable amount of expertise to be gained by those who are on the side of the seller. If you’ve been approached by one or more of the major pawn companies or are considering selling your multi-store independent pawn business, contact Stallcup Group. Stallcup Group will ensure that rather than being forced to sell your pawn business to highest bidder, you are empowered to sell to the right buyer at the right price and the same goes for your pawn shop real estate.
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