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No downturn for Cash Generator

Exclusive: Kevin Feddy
1/12/2008

BOSSES of Bolton-based retail chain Cash Generator are accelerating their expansion plans during the economic crisis as pawnbroking and demand for second-hand household goods soars.

Cash Generator, which has 86 shops, is benefiting as hard-pressed consumers increasingly look for bargains and seek to raise short-term cash by pawning jewellery items.

When the company underwent a £4.3m management buyout earlier this year, bosses outlined plans to grow the chain to 160 outlets over the next five years.

Managing director Julian Urry said today his team was now looking to expand to 200 across the UK and Ireland during the period.

With each shop costing around £200,000, a total investment of nearly £23m is planned. Nearly 700 jobs will be created. The new stores will be a mix of company-owned and franchise outlets.

"The challenging economic conditions are ideal for Cash Generator," said Mr Urry.

"The buying and selling of pre-owned goods has never been more popular. Our original five-year plan was for 160 shops but we are now aiming for 200," he said.

The first Cash Generator store was opened by founder Brian Lewis in Bolton in 1994. Mr Lewis retained a stake in the business following the April buyout, which saw London-based New World Corporate Finance take a stake along with management.

Turnover for the year to January 31 is expected to top £50m, up from £35m.

Around 25 per cent of revenues are from sales of used goods such as electrical items, jewellery and musical instruments. Mr Urry said like-for-like sales have grown 4.7 per cent this year as consumers increasingly seek bargains.

He added: "The growth in popularity of internet sites such as eBay have made buying pre-owned goods of every kind increasingly more fashionable."

Pawnbroking is Cash Generator's fastest-growing division with like-for-like income having doubled this year, as people such as self-employed builders look to raise short-term cash.

However, it only accounts for around four per cent of overall revenues. Cheque cashing and payday loans make up 24 per cent of turnover, and has grown by 13.1 per cent this year. The rest of its income comes from money transfers and foreign currency exchange.

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