Les Gold, the entrepreneurial star of the cable series Hardcore Pawn, on what his pawn emporium has taught him about business, succession, and economic forecasting.
GOLD'S STANDARD: Les Gold says he's turned his grandfather's small pawnshop into a million-dollar business. Now he just needs to make sure his kids can carry on.
Les Gold, patriarch of the Detroit-based American Jewelry and Loan and subject of the series Hardcore Pawn, has been in the pawn business since he was a kid working in his grandfather's little loan office and store. Today, he runs a 50,000-square-foot pawn emporium in a former bowling alley off of 8 Mile Road. Gold says his 50-employee business attracts 1,000 customers each day, who put down items they own in exchange for cash, agreeing to pay it back with 3 percent interest within three months. Recently, as the economy has slowly been picking up, American Jewelry and Loan is also doing a brisk business in selling the items--watches, electronics, prosthetics (yes, prosthetics)--that go unclaimed. In talking with Gold briefly while he was in New York City promoting his new book, For What it's Worth, I asked him about what Wall Street--and entrepreneurs just starting out--can learn from his peculiar multi-generation family business.
How did you pitch the show to producers? I didn't! They came to me. Twice. At first, Seth, my son, turned down the producers. He said, "no way." My daughter, Ashley said, "no way." But I said, "yes!" So to try to keep control of me, they agreed and did the show. Three years and 120 shows later, I don't think they have any regrets.
Why's that? Don't they argue a lot on the show? Honestly, the show has brought us a lot of business. Our shop in Detroit has become a tourist destination. They come from Australia. They come from the Netherlands. In the old days people might not have wanted to know what a pawnbroker had to say.
Your new book is banking on the idea that nowadays, people do want a little business advice from a guy who resells jewelry. One of the reasons I did the show is I wanted to change the perception of what pawn shops are--change the stigma from the '70s movie with Rod Steiger [editor's note: he's probably referencing the 1964 Sidney Lumet film, The Pawnbroker, which is about a Holocaust survivor who operates a pawn shop in East Harlem]. I wanted to show them what a well-lit, well-run business we have.
It's interesting to me that your business can be seen as an economic indicator of sorts. Wall Street can learn from us. It's simple: When the pawn line is long, the economy is bad. When the redemption line is short, people are hurting. And the inverse is true: When the pawn line is short, the economy is good. When the redemption line is long, people are doing better. Wall Street should contact us every three months. I can forecast what the economy is going to do in the next three months. We can tell you how many people are working.
So what does your business right now indicate for the economy this summer? Is it still turning around? As I see three months from now, people are working. People are not as desperate as they have been. The amount per loan has dropped about 10 percent. People don't need as much as they did three months ago.
When the economy is good, though, isn't your business destined to sink? Even though the loan business has gone down slightly recently, our retail sales have grown about 22 percent. When the economy is OK, pawn shops do OK. When the economy is bad, pawn shops do OK. That's why they've lasted 3,000 years. If we lose in one area, we gain it back in another.
Your show is one of two featuring pawn shops on TV right now. Do you have a rivalry with Pawn Stars? I've never looked at the Joneses. My way of thinking is: If I have my eye on what you're doing, I'm taking my eye off what I'm doing. Their show is sort of "Antiques Roadshow." Our show is "what happens in an hones-to-goodness pawn shop." But we're not talking about Coke and Pepsi here. We are just pawn shops trying to survive.
What's the strangest thing you've ever accepted as a pawn? Well, we once got a prosthetic eyeball. We didn't take that one, but we do take prosthetic limbs.
As in plural prosthetic limbs? Sure. And one time we had a $100,000 Elizabeth Taylor broach. I know she owned it because they had the papers.
Your grandfather got you into this business, and your kids are continuing it. How are you going to ensure this business survives in its notoriously fickle industry? There's nothing I want more than for blood to run this business. But, sure, no one can be me. So, I'm not going to retire. I'm going to make sure of its continued success myself. They'll have to carry me out when I die. And then I'll come back to haunt them! Generation after generation, one of those generations is going to ruin the business. What I like to see is that both Ashley and Seth want is to make American Jewelry and Loan the best it can be. The only way the business will survive is if they keep their eye on the prize. Every day when we get to work is we kiss each other hello. And every night we kiss each other goodbye. And that's why it's going to survive.
What advice do you have for entrepreneurs just starting out? You have to wake up every morning knowing how bad you want it. Every dream is accessible if you work hard enough.