Ideal Luxury and Mark Schechter were featured in the January 2023 issue of Luckbox Magazine. The article focuses on Ideal Luxury’s unique model of being a concierge pawnbroker to the wealthy, and why affluent individuals need the services that Ideal Luxury provides.
Read an excerpt of the article below, and you an read the entire article on page 14 of the digital issue of Luckbox magazine.
The Pawn Trade
Article featured in Luckbox, January 2023 Issues
By Vonetta Logan
In his book Pawnonomics, author Stephen Krupnik details the 5,000-year history of the pawnbroking industry and makes the tongue-in-cheek claim that pawnbroking is the second oldest profession. But that joke may have a basis in fact—depending upon your experience, you might walk out of a pawnshop feeling like you got screwed.
“Every year, some 30 million Americans frequent the country’s 11.8k pawnshops in the hopes of securing a loan in exchange for collateral,” writes Zachary Crockett for The Hustle, a website created to debunk nearly everything. Pawnshop loans, purchases and sales add up to $6 billion dollars per year, he notes.
But dollars and cents alone can’t explain the whole pawnshop “experience” of neon signs, buzzing doors, and a man with a cigar protruding from his mouth saying, “Best I can do is…”
Yet, California entrepreneur Mark Schechter suspected there was a better way. To spend time with his family, he went into the jewelry and loan business with his father in 2008. At first, their store was a traditional pawnshop, and Schechter found himself working even more hours than at his old corporate job.
“I had a good friend whose wife is Panamanian,” he said. “Yeah, in Panama [pawn] is totally different. You go sit in someone’s office with a cup of coffee and discuss your private business behind closed doors. It’s done privately—not publicly.”
That seed of an idea germinated, and in 2013 Schechter launched Ideal Luxury in Tustin, California. The American luxury pawn
concierge was born. Ideal Luxury provides clients private consultations in an office that looks more like an Edward Jones than an EZ Loan. He offers loans, consignment and a retail arm of the business.
Some 7.4% of all U.S. households have visited a pawnshop, according to the National Pawnbrokers Association. That figure jumps to 40% among lower-income earners.
The average pawn loan is just $150, but even that amount can be significant to someone in dire financial need. During the pandemic, Schechter quickly pivoted to meeting the needs of high-end customers who wanted to buy tangible assets.
“We saw our retail sales go nuts when COVID first hit,” he recalls. “We had a streak, and I want to say it was almost two straight months where every week we had a retail sale that was five figures or greater.”
Watches became his favorite tangible asset during the pandemic, and Ideal Luxury offers timepieces only from companies like Rolex, Patek Philippe and Audemars Piguet.
Now, as the economic climate shifts, Schechter is seeing changes in his business. “You’ve got to add some zeros” to the end of the loans his clients now need, he says.
“Our loans might have been 20% of our business because we’re a quality play, not a quantity play,” Schechter says of the days before the pandemic. “I would say right now on the lending side it’s probably closer to 40%,” with an increasing number of loans sought for luxury purses, watches and jewelry.
So, what’s next for Ideal Luxury?
“We’ve pulled back on what we take in and how much we offer,” Schechter acknowledges. “It’s gone from a seller’s market to a buyer’s market. So, before I would take what I could get, but I can only buy so many watches and diamonds in the next 30 days. I’ve got to make sure that what I’m buying is something that I don’t mind owning for a long time if things get really bad.”
He sees that trend lasting until the end of Q4 2023.