Adams jewelry.

Khanfar, Nile ; Loudon, David

CASE DESCRIPTION

The primary subject matter of this case concerns the operational philosophy and actions of a small retail jewelry store. Secondary issues examined include the nature of the jewelry and diamond market, selecting an appropriate target market, developing a merchandise mix to satisfy target customers, pricing and promotion strategies for a small retail jeweler, and store location decisions. The case has a difficulty level of four, appropriate for senior level. The case is designed to be taught in one class hour and is expected to require one hour of outside preparation by students.

CASE SYNOPSIS

Jack Adams owns and manages an independent jewelry store in Florida. He is facing a number of issues concerning the store's competitive effectiveness in the local jewelry market. The immediate decision is whether he should move from his long-established store location. Although his store is not very up-to-date, it is in a high-traffic location and receives a lot of exposure. He caters to a middle class clientele, but fancies his business as a higher quality, upscale operation. Thus, there are issues of image and positioning in the local jewelry market among competitors. Other questions concern his lack of effective promotion activities and hours and days of operation. All of Jack's decisions relate to the issue of his customer service and marketing orientation. The case also incorporates global dimensions as it describes the nature of the diamond market.

BACKGROUND

Adams Jewelry is a moderate-sized jewelry store located on one of the busiest streets of a medium-sized town in Florida. Its location is at a very visible corner of a small strip mall on the west central side of the city. Its location is considered prime because it directly faces a very busy fourlane, U.S. highway running through the city. The town's population is around 100,000 with an MSA population of over 150,000.

Adams Jewelry started in 1995, when Jack Adams, at age 40, decided to leave Nashville, Tennessee where he worked for eighteen years as a jeweler, to move back to his hometown. Coming out of a divorce, Jack needed the financial help of his parents to buy an established local jewelry store for $15,000. The price included some inventory, jewelry display cabinets, and jewelry repair equipment. The purchase was considered an attractive deal for a store that was originally established in 1950. His parents co-signed for him at a local bank to help him obtain a

credit line of $20,000 to help buy jewelry for inventory.

Jack is a very skillful jeweler in terms of fixing and even casting jewelry. Casting is the process of crafting jewelry from scratch. This includes custom creation of rings, bracelets, pendants, etc. However, Jack has an introvert's personality. He is normally a serious person. He arrives at work around 8:30 AM and stays until closing at 5:30 PM. His customers like him because he is very honest and does an excellent job creating and repairing jewelry. He rarely leaves the store during business hours. He always eats his lunch at the store. Jack likes to wear Bermuda shorts at work sometimes during weekdays and the weekends.

Although on a high-volume thoroughfare, Adams Jewelry is located in a 30-year-old U-shaped, strip shopping center. All of the center's tenants have turned over several times. The shopping center's anchor building (formerly a supermarket) is now a bingo parlor. The exterior of Adams' store is an out-of-style light brown brick with faded red canopies providing shade to two of several parking spots in front of the store. One of the awnings is torn. Jack and his mother park their vehicles in front of the store (under the covered parking) leaving customers to park elsewhere in the huge, largely unoccupied asphalt lot.

The large plate glass front windows of the store are covered with old, formerly white sheer curtains that have now been discolored by the sun to a light brown tone. The way the drapes are hung on the windows does not look very up-to-date. The carpet is a light pink color and the texture is worn out in the middle due to people walking on it over the years. The jewelry cabinets are made out of pink-colored Formica. The bottom of the cabinets that touches the store floor is rather worn.

Jack's mother, Kathryn, is a very sharp dresser who wears beautiful jewelry and has an outgoing personality and knows how to interact with customers. She keeps the books for the store and helps to wait on customers whenever needed. Jack's parents are well known in the area. In addition to Jack and his mother there are four other people that work for Adams Jewelry: "Ms. Johnette," Casey, Anna, and Ralph.

Ms. Johnette is a nice lady in her mid-forties. She is married to a carpenter and has three teenage daughters. She is the type of person who looks familiar, like the next-door neighbor. Her position is a sales person and she works three days a week at an hourly wage of $7 plus commissions. She comes across to customers as a natural "down home" lady. Casey is married to Jack's step-brother. She has a full-time job at a large local company and works at Adams only on Saturdays. Her main job is in sales. Anna is Jack's cousin. She is a beautiful lady in her late thirties. She works three days a week, especially whenever Ms. Johnette is not working.

Ralph, about 50 years of age, is a very nice person who was forced to retire from his job as a truck driver. He received a workman's comp settlement from a back injury due to driving long hours every day. The situation forced him to seek help from his friend Jack. Jack offered to train him to repair jewelry. Ralph makes five dollars on every ring he sizes for Jack whenever Jack does not have time to do extra work. Ralph comes to work using a cane and he likes to wear shorts in the summer. His adult son, Barry, is rumored to have had a substance-abuse problem and has lots of tattoos. He sometimes comes by the store dressed in a black T-Shirt and tattered black jeans and normally goes straight behind the counter to the workbench to talk to his father. Customers often look rather surprised when they see him going behind the counter.

Adams Jewelry is open six days a week, Monday-Friday from 9:30 AM-5:30 PM and on Saturdays from 9:30 AM-1:30 PM. Although several independent jewelry stores in the city keep their doors open until 7:30 PM and the chain jewelers usually stay open until 9:00 PM, Jack insists on closing his store at 5:30 PM. The store closes on all major holidays, including the Friday after Thanksgiving. When asked about the reason he always closes the store on the busiest shopping day of the year, Jack replied that his daughters come from Nashville to visit him and he wants to spend time with them. Each of the other local independent jewelry stores are thought to be doing perhaps $20,000-$25,000 of business on that day alone. Jack also closes the store for a week every year around the Fourth of July. His mother usually takes the whole extended family at her own expense to the South Carolina coast. From 1995 (the year Jack bought the store) until 2001, Adams Jewelry experienced a steady growth in business. In those six years, Adams' sales went from $120,000 per year to a record $270,000. Although the growth percentage seems high, it is not so significant when compared to sales of other jewelry stores in the market. There are several small jewelry stores that started in business at about the same time and their sales had already surpassed the $1 million mark per annum by 2001.

COMPETITION

Jewelry stores in Jack's city differ on a number of attributes: 1) Some are more repair-intensive than sales-focused. For example Adams does more business in repairing jewelry than selling jewelry. Other stores may not have a repair person on duty; therefore, they would contract with a repair jewelry store to do the work for them; 2) Social status of customers they attract (lower class to upper class); 3) Quality of diamonds (low-grade to high-grade diamonds). 4) Well-known designer lines carried (e.g. for jewelry--Simon G, Mickey Moto Pearls, etc; e.g., in watches--Rolex, Movado, Tag Heuer, Baume Mercier, etc.); 5) Inventory (small vs. large); and 6) Location (prime location of town, regional mall, or in a poorer area, etc. Table 1 provides a brief description of jewelry stores categorized according to these types of criteria.

The jewelry business can be very lucrative. Some jewelers obtain as much as 100-400 percent markups. Jewelers like Hilton and Marvin's can demand higher markups for their fine jewelry due to the high quality of their jewelry and its immediate availability. Also the additional lines of luxury watches such as Rolex and Tag Heuer can bring more customers into the jewelry store and add more value to the credibility of the store.

In addition to high markups, some jewelry stores such as Fantasy, Gordons, and Zales offer their own charge and credit card account. By doing so, they not only make it easier for a customer to purchase their products, but also reap a high rate of interest (19-25%) on charge account balances. Adams Jewelers only takes credit cards, cash, or checks and does not offer their own credit card or even a layaway plan.

In addition to jewelry stores, there has been a new contender in the jewelry business--pawn shops. Pawn shops offer needy customers the opportunity to borrow money on many valuable items they "pawn" and leave with the shop in the form of collateral. Pawnbrokers normally advance these customers loans that amount to 10%-40% of the wholesale value of the item. If the customer does not come back and pay off the loan (with legally-allowable interest at a typical rate of 24% a month) in the specified period, they will automatically forfeit their ownership rights to the pawned merchandise. Pawn shop brokers have found the jewelry side of their business to be highly lucrative. In fact a major, publicly-held chain store pawn operation estimates that 60% of its profit is derived from jewelry. Many customers buy jewelry from pawn shops at very attractive prices. In fact, some jewelers hire buyers to regularly check pawn shops and buy jewelry for them, especially gold and diamonds. Table 2 provides data on local pawn shops.

THE DIAMOND AND JEWELRY MARKET

Most of the diamond supply around the world is controlled by a cartel, the DeBeers Group. From 2003-2006 the diamond market experienced an increase in diamond prices for stones weighing over 1.25 carats. The jump reached 100% at the beginning of 2006, which made it more expensive for jewelry stores to buy merchandise from wholesalers. The industry has also experienced volatility and a sizable increase in gold prices. The price of one ounce of pure gold went from $369 in May 2003 to a peak of $725 in May 2006. Many experts assert that the global war on terror in Afghanistan and Iraq has caused the U.S. to borrow billions of dollars which has prompted many investors to switch from investing in the U.S. dollar to more safe investments such as gold and precious metals. Table 3 tracks 36-month precious metal prices.

Jewelry stores can buy jewelry from wholesalers or brokers under several methods: cash, check, memo, and consignment. The success of the memo and consignment methods depends on several factors such as the credit worthiness of the jewelry store, willingness of the wholesaler and the jewelry store to take the risk, market prices, and jewelry store potential to sell the merchandise.

Cash--the buyer gets the best deal on purchases because the seller does not disclose cash in their accounting practices; that is, the transaction is "off the books." This is an automatic immediate sale. The buyer examines the merchandise and decides immediately whether to purchase or not. If a decision to purchase is made, then payment for the merchandise is expected immediately.

Check--the buyer gets the second best deal because the seller will have to disclose the sale and pay taxes on the profits. Normally, the price of the merchandise is higher than if the buyer pays by check for the merchandise.

Memo--the buyer commits to buy the merchandise; however, he will be given flexible terms to pay for them. Terms differ from one wholesaler to another. Memos are usually from 30 days up to six months. Also, the longer the term the higher the price of the merchandise. Most jewelry stores use this method, especially when stocking up for Mothers Day and the Christmas season.

Consignment--the most expensive method for jewelers. The jeweler will make an agreement with a wholesaler to display their merchandise in the store before a huge selling season (e.g., Christmas). At the end of that period, the wholesaler will visit the jewelry store to take inventory of the merchandise. The jewelry store pays the wholesaler for the jewelry that was sold at the specified price agreed upon when the consignment arrangement was made, and takes back the jewelry that was not sold. At times, the wholesaler demands a low-interest payment for the consigned jewelry.

CURRENT SITUATION

From late 2001 until 2006, Adams Jewelry experienced a steady decline in sales. Jack Adams attributes the decline to increasing diamond and gold wholesale prices and rising gasoline prices. He believes that people are worried about making enough money to pay for food and gasoline.

Despite the increase in precious metal prices many jewelry stores have experienced a growth in their sales. In fact the latest newcomer to the jewelry market was Jonathan Smart who opened Transitions Jewelry less than one-half mile from Adams. Smart worked for Arthur Jacobson (owner of A-J Jewelers) for several years as their main jewelry repair person. When Mr. Jacobson recently retired and closed his 60-year old business, Jonathan decided to open his own store. Many jewelry wholesale companies offered to supply him with jewelry and diamonds under flexible terms. These terms include memos reaching, in some cases, six months to pay, and jewelry offered on consignment.

Jack Adams has a penchant for high-quality jewelry. He likes to carry only inventory of diamonds that are near colorless or colorless grade (D-J), with medium to high clarity grade (SI2-F), and well-cut stones. (A number of diamond industry websites, such as www.gia.edu, provide a comprehensive discussion of diamond characteristics, including cut, carat, color, clarity, and prices). When Jack buys from wholesalers, he does not like to pay the prices these precious stones command. He makes sure that he pays as little as possible for them unless his customer pays him in advance for a diamond--then he is willing to pay more money for them. He tries to pay only by cash or check for the jewelry he buys.

A part-time wholesaler who regularly visits pawn shops and buys lots of jewelry from them recently said, "It is hard to do business with Jack. I offer him a diamond ring for 30% below wholesale and he wants me to sell it to him for 50% below! When I asked 'Why,' Jack replied that he knows that I bought it very cheap." As a result, the part-time wholesaler shied away from doing more business with Jack.

Jack seeks to educate his customers about the four Cs in the diamond business: color, clarity, cut, and carat weight. Many of his customers like his low prices and diamond quality. He always tells his customers that his prices are lower than all other jewelers in the city, especially when compared on the basis of quality.

However, not all customers can afford to pay the prices for high-quality jewelry and not all of them have cash or a credit card such as Visa, MasterCard or American Express. Jack does not offer his customers a store credit card like most jewelry stores in the regional mall. He accepts cash, checks, and major credit cards and has an agreement with a small financing company that finances customers to buy jewelry from his store.

A local diamond wholesaler named Garrett Zucker is a friend of Jack's. Mr. Zucker sells jewelry for Mark Goyem, a diamond importer in New York. Jack normally calls Zucker whenever he has a diamond sold so that Zucker orders it from Goyem and has it delivered via Federal Express. Zucker has tried on several occasions to encourage Jack to invest more money in store inventory and to remodel the interior of his store. The following conversation between Jack and Garrett took place recently:

Zucker: Jack ... why don't you buy stones of more that one-half carat in weight and keep them in stock.

Jack: (Laughing) I do not have lots of money to pay for them. I have $15,000 saved to add a third bedroom to my house so that my daughters will be more comfortable when they come and visit me with their husbands at Thanksgiving. Plus, why should I buy when, whenever I need a stone, you send it to me?

Zucker: But Jack, what if it looks like the customer may not be willing to wait until the diamond arrives?

Jack: Oh well ... I guess I will take my chances.

Zucker: Just in the last seven years, I have seen three jewelry stores here take off with their business and they're selling lots of jewelry. In fact most of those jewelers have less experience than you and came to this market several years after you opened your store. I know this because they buy jewelry from me, and some of their orders include platinum rings with beautiful antique designs and diamond stones from one carat to three carats. Can you imagine how much money those jewelers are making off of these large stones?

Jack: Who are they?

Zucker: They are Marvin's, Transitions, and Roland Samson. That does not include your neighbor down the street, Dollar Country Pawn. Have you been to any of these stores lately?

Jack: No. You see me ... I am always working here ... I just do not have time.

Zucker: I think you will be surprised when you see the beautiful layout of some of these stores and the variety of inventory they carry. Also, you can buy jewelry from Dollar Country Pawn with unbelievably good deals ... sometimes much less than wholesale Prices ... It is just a thought.

Jack: I will see. I will try to do that whenever I do not have too much repair work to get out the door.

Zucker: Why don't you hire a professional jewelry repair person?

Jack: For what?

Zucker: To help you with repair work

Jack: I do not have enough work for a professional jewelry repair person.

Zucker: Do you know that Ralph Samson does repair and sizes rings for all of the jewelry stores at the big mall? He hired an artist repair person by the name of Colin, and I tell you they are doing a phenomenal business. In fact, Ralph told me that he paid Colin $70,000 in income last year and he is on track to make $80,000 this year!

Jack: Wow ... that is a lot of money! I make a whole lot less than that myself and I own the store.

Zucker: By the way--changing the subject, but it's related to others' perceptions of your store--I see that you and your mother always park your vehicles in front of the store directly under the canopy. Jack ... If I were you, I would park my vehicle in the parking lot and let customers park there instead.

Jack: WHY?!

Zucker: Because sometimes your customers may find it hard to park far away to come to your store. And some of them may just need to pick up their repaired jewelry ... you know like in and out.

Jack: I cannot let anybody park in my special parking spot. I am the owner here! If they like it, fine, and if they do not like it, that is fine, too!

Zucker: OK ... it is up to you my friend ... like you say ... you are the owner.

Franz Yeager, another wholesaler who frequently visits Jack's store, once advised Jack to dispose of the tall, rusty-looking sign outside his store and replace it with an electronic message board. He told Jack that he could program words and animations to display on the sign like rings and bracelets in various shapes and quote his prices. Jack liked the idea. A few days later, Jack purchased an electronic sign for $7,430 and financed the amount for three years. However, it was the type that is displayed on the inside window of the store and not on the outside.

A few days later, when Franz visited Adams Jewelry, he noticed the new sign and immediately thought that it was a bad decision. This was because the way the store is positioned at an acute angle toward the busy street makes it difficult for the sign to have full, direct exposure. In addition, it is difficult for people traveling by at the speed limit to take it in, or for it to be read from a distance, or for people driving on the opposite side of the road to see it. Jack and Franz had the following conversation:

Franz: Hello my friend.

Jack: Hello Franz ... how are you?

Franz: I am fine thank you ... how about you?

Jack: I took your advice and bought the sign. What do you think?

Franz: I saw it ... but I think you should have bought the one that you can display outside rather than inside?

Jack: That one is too expensive (around $13K) and I just cannot afford it!

Franz: OK ... I understand ... how is business?

Jack: It is slow ... I hope it picks up.

Franz: What is the problem?

Jack: I do not know. I am only working on repairs and hardly selling anything.

Franz: May I tell you something without you getting upset?

Jack: Sure ...

Franz: The other day, I referred one of my friends to come and see you about buying an engagement ring. He told me that once he entered your store, he did not like it.

Jack: Why?

Franz: He said that it does not look like a jewelry store. But he said that Ms. Johnette was very nice to him.

Jack: What do you mean?

Franz: He said that the carpet was worn, the window drapes looked old. You did not have a selection of platinum or 18 carat gold wedding rings or men's wedding rings ... all the diamonds you had were too small! Also, he said that your attire was not what he expected to see in a jewelry store. Please do not get mad at me; I am just telling you what he said.

Jack: There is nothing wrong with my carpet and drapes. I will be more than glad to order him what he is looking for. You know my prices will be cheaper than all other stores out there.

Franz: Unfortunately it is too late; he already bought a ring from Marvin's ... he had it in stock.

Jack: Oh well ... I bet you, Franz, that your friend must have paid at least 30% more for the stone.

Franz: I did not ask him what he paid for it, but he and his fiance seemed very happy with the rings.

Jack: Oh well ... I cannot win them all.

Recently, Jack treated himself to a new vehicle. He traded in his eight-year-old Ford full-size truck and bought a new 2006 Chevrolet dual cab, full-size truck.

Jack does not believe in advertising on television or radio, or even in newspapers. He said that he tried it before and it was a waste of his money. He always believed that jewelry stores who offer a "sale" are actually deceiving the public. He thinks that the best way to advertise is through word of mouth. However, he has had an Adams Jewelry website established for a time now; though he has not had much luck selling jewelry through the site--only one customer who bought a ring. One of Jack's customers, a retired schoolteacher, mentioned to him when she visited the store recently that she found lots of grammatical mistakes on his website.

There are several problems to selling jewelry over the Internet. First, it is difficult to show a clear picture of jewelry on the web. Second, when you sell a piece of jewelry on the Internet and the person receives the item, it sometimes looks different from what they were expecting based on the website view. Third, whenever a jeweler characterizes a diamond on the web, they normally relax their descriptions in terms of the four C's, especially color and clarity. Finally, assume that the seller may offer a 7-day money-back guarantee. Upon receipt of the item the buyer may then take the piece of jewelry to another jeweler to see if it is worth the price paid for it. This jeweler may then try to sell them a piece from their own inventory. Normally, stores that do best when selling over the Internet are those with high credibility that offer diamonds with certificates of authenticity and description.

Jack is considering relocating his store because the lease is coming up for renewal and the owner of the property is increasing the monthly rental from $750 to $1,100. Included in the new monthly rate is the condition that the owner of the property will remodel the outside appearance of the store. Jack tried to offer to buy the building or even sign a lease with an option to purchase, but the owner of the property refused, saying he does not want to sell it. After searching out alternative locations, Jack has identified a possible new location for his business. It is less than a mile away from his current store. He is attracted to the location because he can avoid paying the planned $1,100 monthly lease; however, he would have to sacrifice some floor space. His new rent for the smaller premises would be $850 with an option to buy the building. Although not on a major U.S. highway, it is on a new 4-lane road accessed by many commuters as they exit the Interstate highway several blocks away. The new road is filling up with medical and other office buildings and small strip retail centers. His shop would be in a brand new small strip center being completed. It has an up-to-date looking exterior of brick, with two small windows and a door. He will be able to choose the carpet, but he plans to move his present, serviceable jewelry cabinets into the building if he takes it. Two parking spaces in the new concrete lot are directly in front of his section of the strip center. Within the next three months, Jack must decide whether or not to move to the new location or stay put.

Nile Khanfar, Nova Southeastern University

David Loudon, Samford University

Table 1: Jewelry Store Competitors

Store Miles (S)ales Buyer
 from and/or Social
 Adams (R)epair Class

Austin 2.2 S Upper
Jewelers Middle to
 Upper

Fantasy 1.5 S/R Middle to
Jewelers Upper
(West)

Fantasy 3 S/R Middle to
Jewelers Upper
(East)

Foster's 7.2 S Lower to
Jewelry Upper

Hilton 3.7 S/R Upper
Jewelers Middle to
 Upper

Gordons 7.2 S Lower to
Jewelers Middle

Jewelry 7.2 S Lower
Emporium
Jewelry Place 1.8 S/R Lower to
 Middle

Kay Jewelers 7.2 S Lower

Marvin's Fine 4.5 S/R Upper
Jewelry Middle to
 Upper

Adams Jewelers S/R Lower to
 Middle

A-J 5.8 S/R Upper
Jewelers Middle to
 Upper

Roland Samson 4.7 S/R Upper
Jewelers Middle to
 Upper

Seventh Heaven 7.2 S Middle to
 Upper
 Middle

Displaycase 0.9 S/R Middle
Jewelry

Sylvester 4 S/R Lower to
Thompson Middle
Jewelry

Transitions 1.4 S/R Middle to
Fine Jewelry Upper
 Middle

Zales Jewelers 7.2 S Lower to
 Middle

Store Diamond Designer Designer
 Quality Jewelry Watches

Austin Medium to None None
Jewelers High

Fantasy Low to None Seiko
Jewelers High Citizen
(West) Fossil

Fantasy Low to None Seiko
Jewelers High Citizen
(East) Fossil

Foster's Low None Seiko
Jewelry Citizen

Hilton High Several Rolex
Jewelers Movado
 Tag Heuer

Gordons Low None Seiko
Jewelers Fossil

Jewelry Low None None
Emporium
Jewelry Place Medium None None

Kay Jewelers Low None None

Marvin's Fine High Several Movado
Jewelry Tag Heuer

Adams Jewelers Medium to None Seiko
 High Citizen

A-J Medium None Rolex
Jewelers Movado
 Tag Heuer

Roland Samson Medium to None None
Jewelers High

Seventh Heaven Low None None

Displaycase Low to None None
Jewelry Medium

Sylvester Medium None None
Thompson
Jewelry

Transitions Medium to Few None
Fine Jewelry High

Zales Jewelers Low None None

Store Inventory $ Annual Location
 Size Sales Quality

Austin Medium 200K Bad
Jewelers

Fantasy Large 500K Prime
Jewelers
(West)

Fantasy Large 500K Prime
Jewelers
(East)

Foster's Large 600K Mall
Jewelry

Hilton Very large 3+ Million Prime
Jewelers

Gordons Large 400K Mall
Jewelers

Jewelry Small 220K Mall
Emporium
Jewelry Place Medium 70K Fair

Kay Jewelers Medium 500K Mall

Marvin's Fine Large 1+ Million Prime
Jewelry

Adams Jewelers Medium 180K Prime

A-J Large 400K Bad
Jewelers

Roland Samson Medium 1.5 Million Prime
Jewelers

Seventh Heaven Small 300K Mall

Displaycase Large 400K Prime
Jewelry

Sylvester Small 180K Prime
Thompson
Jewelry

Transitions Medium 320K Fair
Fine Jewelry

Zales Jewelers Large 700K Mall

Source: Adams' estimates

Table 2: Local Pawn Shops

Store Miles from Quality of
 Adams Jewelry Diamonds

Rivers Pawn Shop 4.3 Low to Medium
 (East)
Rivers Pawn Shop 1.8 Low to Medium
 (West)
Dollar Country Pawn 4.3 Low to High
 (East)
Dollar Country Pawn 0.6 Low to High
 (West)
Dexter St Pawn 5 Medium
Fair Pawn Shop 4.5 Low to Medium
Florida Pawn Shop 0.5 Low to Medium
Stewart 2.7 Low to Medium
Pawn Shop
Big City Pawn 4.5 Low to Medium

Store $ Annual Sales Location
 of Jewelry

Rivers Pawn Shop 120K Bad
 (East)
Rivers Pawn Shop 85K Prime
 (West)
Dollar Country Pawn 480K Prime
 (East)
Dollar Country Pawn 550K Prime
 (West)
Dexter St Pawn 64K Prime
Fair Pawn Shop 86K Prime
Florida Pawn Shop 69K Prime
Stewart 64K Bad
Pawn Shop
Big City Pawn 74K Fair

Source: Adams' estimates

Table 3: Precious Metals Prices (3-year history)

Metal High Low

Gold $725.00 $369.20
 5/12/06 10/9/03
Silver $14.94 $4.81
 5/12/06 10/6/03
Platinum $1,331.00 $692.50
 5/17/06 9/17/03
Palladium $404.00 $172.00
 5/12/06 7/5/05

Metal Change Average

Gold $355.80 $461.74
Silver $10.13 $7.73
Platinum $638.50 $918.90
Palladium $232.00 $238.80