Gold as good as furnishings - Khemlani
Published:Sunday | November 14, 2010 | 12:00 AM
Avia Collinder, Sunday Business Writer
With the price of gold continuing to climb, the cash-for-gold trade is providing a revenue boost for some local companies which continue to pour marketing dollars into promoting their stores as exchange points.
Gold prices continue to set record prices and are now trading above US$1,400 on international exchanges.
Locally, Steve Khemlani, the chief executive officer (CEO) of the Khemlani group of companies, says that the customer response to cash for gold has been so good the business now rivals his core trade of selling furniture.
The group has one jewellery store, Jewelerama in Kingston, but several retail- furniture outlets across Jamaica. The chain also includes Lord and Lady, which retails shoes and clothing.
Khemlani Mart in Portmore, which retails both clothing and furnishings, is also now being used as a collection point for the cash-for-gold trade. The group also runs frequent radio advertisements of all locations where the trade is done.
Compared to revenue from gold, the CEO notes that the clothing and shoe business has been "lacklustre" as the economic crisis persists, though fortunately, "it is not nearly as bad as what you see on CNN; what some businesses in the USA are going through".
In the second quarter of the year, Khemlani began an aggressive push to corner the cash-for-gold trade that up to then was largely an informal activity by enterprising vendors.
His offer, Khemlani told Sunday Business, provided Jamaicans with an alternative to street buyers who may also pose a security risk.
"There have been quite a lot of unfortunate stories of persons that have transacted on the streets and with some very shady characters and some very strange merchants selling their jewellery, and have got robbed and hurt. Quite a few have got counterfeit money," he said.
"This is probably one of the reasons why most persons are bringing their jewellery to Jewelerama and Khemlani Mart stores, so they can transact in a private and safe atmosphere."
Sales, he said, remained robust for a number of reasons, including expectations that when the price of gold and silver begins to fall, those who are now trading in their jewellery expect to reacquire pieces at cheaper rates.
Others sell for more personal reasons, he said: the jewellery comes with "bad memories, false promises, and shattered dreams"; some need cash to clear debt; while some say they are giving up such worldly and vain possessions to enter the Church.
Asked to quantify his intake from the trade, Khemlani was reluctant.
"The business is new for us so it is difficult to either have any expectations or set targets and then to judge how well we are doing. In comparison, the furniture business is slightly down but the shoes and clothing is down significantly," he said.
The price offered to Jamaicans for gold, he stated, "varies according to the purity. For example, 10-karat gold has only a little more 40 per cent gold content and the rest is an alloy material."
In 2011, Khemlani said, the chain would be looking at cost-cutting measures, including generating energy from alternative sources to reposition the company for growth.