That year the company was listed on the New York Stock Exchange and the stock split 3 for 2. In 1992, a 4.6 million stock offering raised $45 million, the stock split 2 for 1, and the company opened its 200th store, in Mission, Texas. It was at this point that Daugherty decided to take his company international. He acquired Harvey & Thompson, a U.K. chain with more than 100 years in the pawnshop business. Harvey & Thompson was based in London and had 26 locations in England and Scotland. The pawnshop business in the United Kingdom was essentially the same as that in the United States. Pawn loans, however, generally were secured only by jewelry and gold or silver items and the average loan was larger, approximately $120. In addition, for loans larger installment loans in North Dakota with bad credit than about $40, unredeemed items were sold at auction. Finally, the Consumer Credit Act of 1974 prohibited pawnbrokers from entering into “extortionate credit bargains” with customers and Cash America charged a rate of around 6 percent per month.
The company continued to expand in the United States as well, opening more stores, buying the 18-store Express Cash chain and entering Alabama and Missouri in 1993. At the end of the year the chain operated 280 locations. In 1994, Cash America opened its 300th store and had more than 1,800 employees. That same year it bought shares in Mr. Payroll, a check-cashing franchise operation, and also acquired the ten-store Svensk Pantbel a ning, one of the oldest operating pawnshop chains in Sweden. As in the United Kingdom, the pawnshops in Sweden handled primarily jewelry and precious metals, catering to a more affluent customer. Under a new pawnbroking act passed in 1996, loan terms were not to exceed one year, but the act set no maximum interest rates for pawn loans and did not authorize local boards to regulate those rates as the statute had in the past. Also as with Harvey & Thompson, unredeemed merchandise was sold at public auction, although pawnbrokers could sell items they purchased at auction to the public from their pawnshop. The average loan amount in Sweden was approximately $300. In both Sweden and the United Kingdom, loans generally were outstanding for 180 days or less and forfeiture rates were one-third less than in the United States. At the end of 1994, the company had gross revenues of $221.9 million and $15 million in net profits.
The competition affected the company’s Cash America VIP program, which offered discounts on unredeemed merchandise to frequent shoppers in an effort to attract bargain shoppers
During 1995, the company faced increased competition in the United States. Several companies, including EZCorp, Inc. with 240 locations, and First Cash, Inc., with 50 operating units, completed initial public offerings and announced plans to expand through new locations and acquisitions. A number of smaller companies also entered the market.
Cash America turned to its proprietary loan and inventory tracking system to analyze the problems. The system linked all its U.S. stores to coordinate and manage thousands of loans and more than a million different items of inventory. Using information from that system, Daugherty found that inventory was too high, that unredeemed items were not being turned over quickly enough despite the discounts. He also decided that too much emphasis was being placed on retail to the detriment of the actual loan business.
In last year’s annual report, we discussed a return to our roots – a renewed focus on core lending activities. It was a strategy that had begun to show signs of success, and we made it our mission to continue these efforts throughout 2002.