Sep 16, 2011

Scoin Shop success story

Alan Demby bought his first kruggerands in 1977, paying £50 each for three of the 1oz gold coins that were first produced by the South African Mint in 1967. Today, a kruggerand will set you back £1,200-£1,300, and Demby owns almost 30 gold coin shops throughout South Africa as well as three in the UK.

At the opening of his latest Scoin Shop store at the new Westfield Stratford City mall, Demby said the range of coins he sells will appeal to the same type of collector that frequents his South African stores: 50-plus men who are typically self-employed.

Scoin Shop

"Gold does seem to be the money of dictators," he jokes, "but in reality the coins we sell appeal to collectors rather than investors. There are probably about 20 million coin collectors in the world and they tend to be your average man in the street.

"When we opened our first store we thought it would be tourists who would come in, looking to take back some South African gold from their holiday, but it was locals who found it interesting."

The most expensive sale Demby has made in his 40-year career was for a £1.2m set of coins, but the Stratford store has a range of items for those with shallower pockets, with prices starting £150. On the day I visit, the store is also displaying a £63,000 coin to commemorate the Queen's 60th wedding anniversary, and the London 2012 Olympic Games commemorative gold coin collection, struck in 22 carat gold by the Royal Mint.

Anyone opening a gold coin shop in the present climate could face accusations of cashing in on the soaring gold price and taking advantage of guileless consumers who rush to buy the asset just as the bubble looks like bursting.

The price of gold has once again rocketed to record levels, with the spot price hitting $1,921.41 an ounce last week, leading to fears that jittery investors who have swapped the stock market for the precious metal could see their savings decimated if the gold bubble bursts.
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