Troubled pawnbroker Albemarle & Bond has installed its new boss two weeks ahead of schedule and appointed a turnaround specialist as it seeks to tackle its £51 million debt pile.
The firm, which was rocked last week when plans for a £35m cash injection collapsed, has been hit by a slump in gold prices, while its lenders have given it a month’s breathing space in a bid to avert breaching its banking covenants.
Chris Gillespie, formerly head of the consumer credit arm at doorstep lender Provident Financial, was due to start as Albemarle’s chief executive on 18 October, but he took up the position yesterday, filling a role that had been vacant since the abrupt departure of previous boss Barry Stevenson in April.
Chairman Greville Nicholls, who had been acting as executive chairman, will revert to a non-executive role. He said Gillespie’s accelerated appointment “is in recognition of his energy and enthusiasm to take up the role and the board’s confidence in the difference he can make to the company”.
The firm also said that Colin Whipp, a fellow of the Institute of Turnaround, had joined as chief restructuring officer following last week’s pledge that it would “explore all possible options” to avoid a covenant breach. Whipp is a former director of Glasgow-based van hire firm Leaseway Vehicle Rental, which called in administrators from PwC three years ago and was dissolved in August.
Aim-quoted Albemarle has already closed 33 loss-making “pop-up” gold-buying stores following a slump in precious metal prices and had been hoping to raise £35m through a deeply-discounted rights issue, underwritten by its largest shareholder, Texas-based Ezcorp.
But last week it revealed that four months of talks with Ezcorp had proved fruitless.
Albemarle was founded in 1983 with a single shop in Bristol and floated on Aim in 1995. Last year it bought online payday lender Early Pay Day Loans for £1.2m as it sought to grab a larger slice of the fast-growing market for short-term loans.
However, intense competition on the high street and a plunge in gold prices of more than 20 per cent have hit the business hard. Gold fell to about $1,200 an ounce during the summer, from a record high of $1,920 in late 2011, although the ongoing US government shutdown and budget stand-off has seen a modest upturn in recent days to about $1,311 an ounce.
Shares in the Reading-based Albemarle, which saw its profits fall by a third in the six months to December, have slumped by about 70 per since the end of last month and Owen Jones, an analyst at Shore Capital, said its fate “lies largely with the banks at this stage”.
Jones said Gillespie and Whipp were highly experienced in their respective fields, but the broker was maintaining its “sell” recommendation on the company’s shares, which ended the day 1.5p higher at 35.5p.