It’s a Thursday afternoon at the Brunel shopping centre in Swindon. Flanked by a muffin stand and an injection-moulded child’s ride sits the Guardian Jewellery Company. Little more than a desk and a couple of stand-up banners, it forms an outpost for one of the recession’s few success stories.
Since forming a year ago, the firm has grown from two staff to 75, and is hiring at the rate of five a week. It sets up stalls in shopping centres of medium-sized towns – Basingstoke, High Wycombe, Worcester – and people come to sell their gold jewellery for cash. Guardian then melts the gold down and sells it on. There are 30 locations now, by the end of the summer that figure will be 80, and the firm has started advertising on TV. “We’re on an exponential curve,” says the sales director, Lee Bushell.
For investors, gold is a classic safe port in the storm of recession – John Paulson, for instance, the legendary hedge funder who won big after betting against sub-prime mortgages, recently bought a stake in a South African gold mine. Philip Klapwijk, chairman of the metals consultancy GFMS, believes the price could hit a record $1,100 an ounce this year, despite a recent dip in value. So, ordinary people can make a lot of cash, quickly and easily. “Beat the credit crunch!” suggest Guardian’s banners. A photo shows a hand holding a fan of £20 notes.
Dressed in a tweed jacket and wielding an eyeglass with birdlike scrutiny is Geoff Piddock, Guardian’s Swindon emissary this week. “The amount of gold in each town is amazing,” he says. “People buy it furiously during the boom times, and then get rid of it in the bad.” Geoff has already paid out £17,000 this week. “We used to be dripping in it, didn’t we?” sighs one customer.
A man comes up and dumps a giant coiled gold ring on to the desk, giving the invariable opening gambit: “How much?” Minutes later, Geoff is handing him £130 in fresh bills. “The cash is the key thing. There are places on the internet that give you more money per gram, but you have to send it off – here it’s cash in hand, and everyone loves that.”
Prices are such that people are, surprisingly, often breaking even rather than getting less than they originally paid. Many customers are pensioners, adding to their income with what they find at the bottom of a cabinet (“Ooh, I can buy a fridge-freezer with that!”), but there are also wideboys, housewives, professionals.
“Obviously you get” – he pauses – “a certain type of customer, with sovereign rings and so on, but you get bank workers, all sorts.”
A twentysomething mum, Michelle Fossett, is waiting for a valuation on a pair of pendulous angel earrings – “You can’t wear them nightclubbing; they’re just too heavy.” Why is she cashing them in? “To live, to pay the bills. I’ve got a £237 bill for three months’ electric. This is what it’s coming to. I’ve got to put new clothes on my kids’ backs, get them new uniforms.” Geoff gives her £90 for the earrings. She takes a ring out of her purse. “How much for that?” £7. “I’ll take it.”
Lee says he’s confident that Guardian would survive even in a healthy economy.
“Only 20 per cent of people are selling out of necessity,” he assures me. But even if most people aren’t paying their electricity bills with gold, many are realising the importance of putting some cash away.
However much investors have adversely affected the lives of small-town Britain, the rising price of their commodity of choice is at least providing some small golden opportunities.
