Ramsdens is a diversified financial services provider and retailer which was enjoying a strong growth period to March 2020, prior to the impact of the COVID-19 pandemic. The Group has not been immune from the impact of the pandemic which has touched all aspects of society and adversely impacted the global economy. The Board is confident that Ramsdens is well-positioned to navigate these unprecedented times, supported by our strong balance sheet and good cash position.
The Group operates in the four core business segments of;
- foreign currency exchange, primarily holiday currency notes supplemented by travel card sales and International bank to bank transfers
- pawnbroking loans, which are short term loans up to 6 months in duration secured on items of jewellery or watches
- precious metals buying, which is the buying of gold and silver from customers and selling the non retail pieces to a bullion dealer, and;
- retailing of second hand and new jewellery
During the last financial period, the Group served more than 930,000 customers across its different services.
The business is headquartered in Middlesbrough. The first Ramsdens store opened in Stockton-on-Tees in May 1987 and as at 30 September 20 there are 157 Ramsdens stores including 4 franchised stores (126 as at September 2017) supported by a growing online presence.
In a market where trust is critical, Ramsdens is an increasingly recognised brand in each of our four key business segments and our continued investment in our people, marketing, IT systems, store appearance and store location remain key factors in supporting the Group's growth.
The Board believes that the strong balance sheet and growing positive cash flows to September 2020 underpin the Group's ability to leverage the strength of a recognised high street brand with a diversified offering. The Board is confident that Ramsdens can continue to adapt and prosper, and is focused on delivering strong and ongoing capital and income returns for investors once we come through the COVID-19 impacted trading period.
Our Growth Strategy
Once we move past the COVID-19 adversely impacted trading period and into a "new normal" trading environment, we expect Ramsdens' growth strategy to remain unchanged being built on the following pillars:
- Continuing to improve the performance of our core estate
- Expanding the Ramsdens branch footprint in the UK
- Developing our online proposition
- Continuing to appraise market opportunities presented by operating in a challenging market, and;
- Developing our people
Continuing to improve the performance of our core store estate
The Group has a continuous improvement philosophy. This has resulted in initiatives to:
- Increase staff skills, motivation and performance rewards
- Increase the foreign currency margin and the average transaction value
- Improve retail operations to generate more from the pawnbroking loan book
- Increase the retail jewellery stock whilst maintaining close control of stock turnover and discounting older stock lines
- Investing in the retail jewellery proposition
- Cross selling services across the customer base
- Review store capacity and location
By increasing the performance of the existing stores, the Group will improve the return on capital employed.
Expanding the branch footprint in the UK
The Group has the opportunity to infill within existing geographic territories, “ripple out” from existing territories or seek new territories as it has in the past with growing branch estates in Wales and Scotland.
Developing our online proposition
The development of the online channel is seen as additive to the core branch proposition. Online is viewed as its own profit centre, akin to a branch, but also acts as a reference point for all branches to aid in-store sales.
The contribution from the online activity continues to grow and with this momentum we have recently developed and launched a new retail website in October 2020 to enhance the user experience and improve conversion rates by ensuring customers can find what they are looking for quickly and more efficiently than ever before. The development has remodelled the front end that the customer sees and also optimised the platform on which the website is built which we hope will achieve higher rankings in Google searches.
Offering a holistic set of payment options to our customers further underlines the commitment to improving conversion rate and the re-introduction of interest free finance as an additional online payment method is expected to help drive additional growth. We are looking at additional payment options for the customer early in 2021.
Additional investment to deliver website personalisation (the process of creating customised experiences for visitors to the website using AI) is also planned and is expected to further increase conversion rate.
The branch estate only covers approximately 25% of the UK population and a fast-improving online offering will allow those people outside of the Ramsdens network to have access to great jewellery at fantastic prices.
Our online retail offering will be further improved by additional investments in software to enhance product images and upload times, increased focus on organic search engine optimisation (‘SEO’) and online advertising. With more products being listed on the website than ever before, the customer has a greater choice and our branch network has the opportunity to sell more products from our website, which acts as a catalogue for our products.
The currency part of the Group’s website has been developed to improve the customer journey throughout the 18 month period. The improvements made are demonstrated by the growth in Click and Collect foreign currency volumes through www.ramsdensforcash.co.uk in the financial period. Further developments are planned to improve the customer journey. While the website is mobile friendly, an app is being developed alongside the planned launch of a multi-currency travel card.
Continuing to appraise market opportunities presented by operating in a challenging market
The retail landscape has been challenging for a number of years. The uncertainties of Brexit and general economic outlook created a headwind for most retailers but the COVID-19 pandemic seems to have been a challenge too far for some high street retail jewellery outlets, bureaux de change and travel agents with retail stores closing permanently in many towns. This changing and challenging backdrop will create an opportunity to acquire displaced customers that do not wish to shop online once we see a post-pandemic new normal. There is the caveat that certain high streets may have been damaged too badly to ever recover without large investment in towns or changes to the non-domestic rates system. Our property portfolio has been purposefully managed to be as flexible as possible to provide a defensive quality in case of one of our stores becomes isolated and performance deteriorates, or agile should the town nucleus shift.
The number of pawnbroking outlets in the UK continues to fall. Our estimation is that there are circa 130 pawnbroking businesses in the UK trading from circa 870 locations. The largest three National Pawnbroker Association members account for circa 610 locations. Within our existing geographic territories, the opportunity to acquire good pawnbrokers is limited but there may be the possibility to acquire and expand our geographic footprint in the future.
Developing our people
It has been clearly demonstrated since the outbreak of the pandemic earlier in 2020, that one of Ramsdens’ greatest strengths is its people. Our aim is to nurture, train and develop the best talent in our industry, and to that end during the period the senior management team have been collectively undertaking a leadership development programme. This is assisting with an ongoing desire to enhance and demonstrate our three core values of being trusted, open and passionate and live the FCA Conduct Rules.
The pride and enthusiasm shown by all of our employees continues to create a working environment of infectious enthusiasm to deliver the Group’s mission statement, namely to provide a great customer offering and give such fantastic service that our customers become ambassadors for Ramsdens.
As well as doing the ‘day job’ and seeking a never ending higher bar of achievement during the 18 month reporting period, the team have successfully embedded the acquired Money Shop stores, trained the 89 staff members who transferred to Ramsdens in the Ramsdens values and ways, maintained high levels of repeat business from loyal customers, and faced the challenges of COVID-19 head on. We have only been able to do this thanks to the team’s dedication, commitment, willingness to strive for continuous improvement and its focus on delivering fantastic service to our customers.
Reflecting the vital role of our staff and their contribution, in the period from March to July 2020 the Group topped up all furloughed employees’ pay to 100% of their normal salaries. We are grateful to the UK Government for providing the Coronavirus Job Retention (Furlough) Scheme and its extension to March 2021 which has enabled the Group to protect the jobs of the Group’s skilled employees whose training and development we have already invested in.