In Dec. 25 IssueBy Kim GrahamTimes Journal Reporter
As the recession claims more casualties, many look to pawn brokers, consignment and used merchandise stores to remedy thin wallet syndrome.
Whether it's an acoustic guitar or a used power tool, more and more folks are pawning their possessions to make ends meet.
"We see a lot of new faces," said Michael Bray, owner of Toe Joe's Pawn in Russell Springs. "They're wanting to pawn and never coming back. You have to be careful what you pawn anymore because they just won't come back and get it."
Once the merchandise makes it to the display case, that is as far as it goes. Consumers are not purchasing the previously pawned items.
Bray said they used to sell a lot of car audio equipment and video game systems such as Playstation 2, Nintendo Wii and Xbox 360 but not now. He says his store has seen around a 40 to 50 percent decrease in sales.
"Use to, we'd put (merchandise) out and sell it," said Bray. "Now it's stacking up in the floor and everywhere else."
When he manages to sell products, it is at a greatly reduced price.
"I sold a TV yesterday for $20," Bray said. "I had to sell it to get it out the door."
Bray started his business 2 years ago with nothing but empty cases and in 2 years time, there is barely room to walk in the store.
Preston's Pawn in Russell Springs, in business 20 years, is seeing the same influx of cash-strapped customers.
"I turn down more pawn than I used to pawn all together," said Chris Stapp, owner Preston's Pawn.
Display cases and shelves at the store are filled with everything from diamond rings and electronics to power saws.
"If you don't watch it, you'll have more than you can sell," said Stapp. "If I already have 4 cameras there's no need to buy another."
With merchandise moving slowly off his shelves, Stapp is relying on rising gold prices to make ends meet.
"Gold is what's keeping everything afloat around here," Stapp said. "I sell gold to a smelter in Louisville."
Traditionally, the store sells a lot of good tools but even they aren't moving now. He says this is as bad as he has ever seen business.
Some people pawn items, leave them a month and pick it up with a credit card Stapp said.
"That's sad times," said Stapp.
A twenty year veteran in the consignment business, New to You Consignment at Key Village Shopping Center in Russell Springs is seeing an increase in business.
"I've had a lot of people wanting to bring clothes (to consign)," said Sondra Powell, owner New to You Consignment for the last 10 years. "I've had so many I've had to turn some away."
She's seeing a lot of business from previous customers coming back after being gone for a few years and many new customers.
"They're looking for a bargain," said Powell. "Sales have been up about 25% and that's being a little conservative. We've been busy."
S&L Consignment store opened in 1990 and has been operated by Jan Thomas for the last 10 years but the store has seen much better times.
"If it don't get better," said Jan Thomas, owner S&L consignment. "I'm going to have to close my doors. This is the very worst I've ever seen it."
She says competing with large chain discount stores like Fred's, K-Mart and Walmart is hard.
Thomas bought a child's jogging suit at Walmart recently for $5. That same jogging suit, lightly used, for sale in her store would sell for $2. She says most people will go ahead and pay a little more to purchase low priced new merchandise instead of shopping in her store.
Business is so slow Thomas struggles just to pay the store's $700 rent and the $200-$400 electric bill.
"We've only made $149 dollars today," said Thomas. "Today I'm going to work for nothing, just to pay the bills. The economy has hit me and hit me hard."
Over the last 3 months, Thomas said her business has reduced substantially instead of increasing as it normally would during the holiday season.
If revenues continue to decline, Thomas says S&L Consignment may not make it into 2009.
"In Russell County we are really struggling," said Thomas. "I'm going to stay with it as long as it pays its own bills."
Across town at 127 Peddler's Mall, owner Elwood Mann, rents space to vendors who sell used and discounted new merchandise. He says the economy should help business at his store.
"As the economy gets worse, our business gets better," said Mann. "You can find new merchandise for less and good used products. People are using their money more wisely and cutting back any way they can."
Mann's business seems to be holding steady through widespread economic troubles.
"There's been just as much business as last year," Mann said. "Overall, I've looked at some of the numbers and some months this year have been almost to the dollar what it was last year."
For those who have a little extra jingle in their pocket, it's definitely a buyer's market.
"Right now, you can buy anything you want for whatever price you name," said Bray.