The Castle Jewelry and Pawn; No Hassle at The Castle

Phil Block is president of The Castle Jewelry and Pawn, and has been a member of NPA since 1995. Headquartered in Lexington, KY, the company has nine stores around the state, plus one in Ohio, and employs 120 people. Phil runs the company with his son, Barrett, a recent Wharton School of Business graduate.

National Pawnbroker (NP): How did you get started in the industry?
Phil Block (PB): The idea of getting into the pawn business was not my own. My best friend and business partner, Jimmy Lambert, had a friend, Mary Alice Casey, who owned a pawn store in Henderson, KY. He thought it was a terrific business model and encouraged me to check out her store. I had never been in one before and was unsure about the whole thing, so Jimmy sent me an article in GQ magazine about Jack Daugherty, the Pawn King, who had recently gone public with Cash America with only 32 stores. After seeing the article and spending a few weeks working with Mary Alice in her store, I was sold on the idea of starting our own pawn store.

NP: What makes your stores different from other pawn stores in the area?
PB: From the very beginning, we designed our stores to look more like high-end jewelry stores. We carry a large selection of new jewelry, and always make sure our reconditioned jewelry looks like new before it goes into inventory. We actually give the same warranty on both our new and reconditioned jewelry.

In 1991, I made my first trip to Antwerp, Belgium, the diamond capital of the world, and started to import diamonds directly from overseas. We have continued to buy diamonds and jewelry overseas ever since. Our employees study our own GIA-based curriculum and are trained, not only to sell jewelry, but also to be great pawnbrokers. Most importantly, our employees feel like part of a family. We live by the credo, “There’s no hassle at The Castle”.

NP: What are the biggest obstacles facing pawnbrokers today?
PB: Increased competition – not just from other pawn stores, but also jewelry retailers. When we first opened, we were the only pawn store in our third of the city. Now there are seven within a mile of us. The competition among jewelry companies has increased even more. We now compete with supermarkets, department stores, and the internet.

There is also increased government regulation. Thanks to Dodd-Frank and the Patriot Act, we have even encountered growing concerns from our local bank not wanting to handle our sizable cash deposits. Additionally, the Military Lending Act (MLA) is unjustly burdening pawnbrokers nationwide.

NP: How will the new MLA rate cap affect your company?
PB: We have already implemented measures to accommodate the MLA. We have found that each individual loan takes much longer and, consequently, inconveniences all of our customers. Luckily, we aren’t near a military base, but we have tremendous empathy for those stores that are.

NP: What is the best advice you ever received?
PB: I have two. In my 20s, I was in Las Vegas with Jimmy Lambert, who was a personal friend of Cliff Perlman, the president of Caesar’s Palace. There was a plaque in Mr. Perlman’s office that read, “The harder I work, the luckier I get.” I was surprised to see those words in the number one casino in Las Vegas. Needless to say, it left an indelible impression upon me.

The other valuable piece of advice I received is one that originated from Jimmy’s father who said, “A short pencil is better than a long memory.” The older I get, the more important the “short pencil” advice becomes.

NP: How does your company give back to the community?
PB: We support many schools, sports teams, churches, and social organizations by giving them a piece of jewelry to raffle off. When we give them a $100 ring, they’re likely to raise $1000 or $1500 for their cause. We also directly donate money to many charities, both local and national.

NP: Why are you a member of NPA?
PB: Without the NPA, the pawn industry would have no voice or bargaining power against government regulations, like the MLA. The NPA is an invaluable tool for staying informed and alerted to developments facing pawnbrokers nationwide.