It’s not just the poor and middle class who to run pawnshops.

Philippine Daily Inquirer Business Monday
Oct 23, 2006
By Tina Arceo-Dumlao

THE POOR AND THE MIDDLE-CLASS are not the only ones patronizing pawnshops. The rich do too.

Like their countrymen of lesser means, the rich sometimes need quick cash to tide them over until the next windfall and they believe going to a pawnshop is a cheaper and faster alternative to either selling land, withdrawing time deposits or taking out a loan.

The only difference is that the rich pawn high-value items, such as designer bags, signature Swiss watches, diamond rings of at least one carat, fashion jewelry and even home theater systems, in exchange for loans that run in the six figures.

And the affluent do not go to the friendly neighborhood pawnshop, with its requisite bars and heavy safe.

They instead to go to those that specialize in appraising and securing expensive items, such as Agencia de Empenos de Makati Inc, that look more like a fine jewelry store with its art pieces and deep lounge chairs where guests are treated to Lavazza coffee.

Agencia proprietor Mike Dizon tells SundayBiz in an interview that pawning high-value items is actually part of the lifestyle of the affluent in Southeast Asia, and is starting to pick up in the Philippines.

Contrary to popular belief, the rich do sometimes run out of cold cash.

“Most everyone will need cash sometimes, we make it easier and more comfortable for them,” he says.

Dizon says the rich sometimes pawn their possessions for just a short while, from as short as a day to about a month, and the key to getting their items is to ensure that their items will be taken care of and that they get a good price for them.

For this reason, Dizon and his key staff go through training to properly appraise the value of these prized possessions.

Agencia is a member of the US National Association of Watch and Clock Collectors and trained with the Gemological Institute of America.

There are also appraisal experts of Swiss watches, jewelry and diamonds, high-end Southeast Asian paintings and other collectibles like Murano vases from Italy to service discriminating clients that include chief executive officers, show biz talents, basketball players and society matrons.

To ensure the safety of these items, Agencia installed top-of-the-line fire proof safes and the latest in security equipment.

Among the venerated Swiss watches, Patek Philippe, Jaeger-leCoultre and Vacheron Constantin brands command the highest appraisal and are among the most traded in the second hand market, based on his experience operating the Secondo second-hand shop in Glorietta 1, Ayala Center

. Other heavily traded brands included Cartier, Rolex, Breguet, Audemars Piguet, IWC, Officine Panerai, Franck Muller, Omega, A Lange & Sohne, Breitling, Zenith, Chopard and Piaget.

For the jewelry, it’s the Harry Winston, Bulgary and Tiffany Co. brands that are the most popular and enjoy the highest resale value.

Dizon says the value of the watches is dictated partly by the limited supply and the exclusivity attached to the brand.

For those who eventually want to sell their watches, he advises them to keep the box, the tools and the manuals. Without them, the pieces loses some of their value. The same goes for the jewelry.

Watches, he says, are more easily traded than jewelry. Paintings also take a while to be sold because these need to be authenticated.

Dizon admits that the market for his kind of specialty pawnshop is small and not likely to grow as fast as his second-hand shops for watches, but he is happy to service the market because it is steady and less risky than the ordinary pawnshops.

Dizon estimates the default rate at just 10 percent since the owners almost always want to get their items back.

There is such a thing as a sentimental value, after all, and there’s no price tag for that.