Purchasing old jewellery is a recession-proof business, say entrepreneurs who are thriving because of the economic slowdown. As the recession deepens, some Torontonians are parting with valuable jewellery to make ends meet.
Allen Malloy stands in his Leslieville jewellery shop surrounded by a sea of gems. His display cabinets are packed tightly with gold necklaces, watches and diamond rings. From the inside of his shop, it is easy to forget that the rest of the country is suffering through one of the worst recessions in decades.
Malloy is one of several used-jewellery buyers in the city who has managed to turn a profit as the economic slump deepens. In shops across the city, people are turning up with precious jewellery to make some quick cash or to get loans.
For used-jewellery buyers like Malloy, the term ‘recession’ does not evoke panic. He says that he is buying 40 per cent more from customers this year, with scores of people coming in to sell their valuable jewels. More people are also coming in looking for temporary loans, says Malloy. Lending money is not a service he normally offers, but he has encountered people in need of cash who aren’t ready to part with their precious pieces.
‘I buy your jewellery’
Oliver has also noticed an increase in the quality __ of jewellery sold to him. Before the recession hit, clients would come to him with steel Rolex watches worth $3,000 or $4,000 and modestly-sized diamonds. Today, he sees watches worth $10,000_ to $30,000 and two or three-karat diamo-nds that fetch just as much. Oliver notes that his clients are increasingly middle-class, which he attributes to the massive layoffs that have taken place across the country.
Statistics Canada recently reported that 213,000 full-time jobs were slashed in Canada since the beginning of November. And according to finance minister Jim Flaherty, there are more losses to come; he predicts that unemployment will continue to climb in this country in the coming months.
“I feel bad for people, but feel good about giving money out all day long,” Oliver says. Unlike Malloy, Oliver does not resell jewellery to the public. Instead, he melts down the pieces he purchases to sell wholesale. He says he loves his job because he is in a position to help people hurt by the recession. “I only give money, I don’t take money,” he adds.
But not everyone leaves with cash in hand. One sunny afternoon in March a women enters his shop with a brand new watch worth $3,000. He offers her $1,500 for it and she declines.
Surviving the slowdown
For Greg Coombs, selling used gold is one way to cope with the crunch. Coombs is a “stay-at-home-dad” who takes care of his two children Lauren, 5, and Ryan, 2 while his wife Andrea Coombs is at work. Greg says he can make some extra pocket money by selling off valuable pieces. This means he doesn’t have to take from the joint account he shares with his wife.
Andrea lost her job in October of 2007 and says she struggled to find work, especially after the recession reared its head in the fall of 2008. When she landed a position at Union Gas in Brantford, they put their Toronto home on the market and bought a home outside of the city. But their Toronto home never sold, and the Coombs’ are now stuck with two mortgages. Selling a home is tough in the recession, they say, which is why they are looking for new sources of income. “Now, the actual sale price that we’re going to get for our house is probably going to be anywhere from ten to twenty thousand [dollars] less than what we had originally sold it for,” Andrea says.
“It’s been quite the two years,” Greg adds.
In early March, the Toronto Real Estate Board reported that homes in Toronto were selling for less than they were last February. According to the report, the average housing sale price dropped by more than $20,000. In addition, there were 1,895 fewer sales in February 2009 compared to the same month last year.
Greg has already sold a keyboard that belonged to his musician father and is thinking about selling a coin set next. The couple drove in from Brantford to sell used gold to Harold the Jewellery Buyer at his shop in Toronto’s north end. The couple spends most of their earnings on housing costs, food and clothes for the kids. “You spend the money where you have to. [When] we buy clothes…it’s for the kids because they grow out of their stuff,” Andrea says. “I haven’t bought clothes for myself since after my son was born.” That was two years ago.
“It’s your basic survival,” Andrea says. "Everyday living," her husband adds with a sigh.
