Rosland Capital has sold hundreds of millions of dollars worth of gold coins to Americans worried about inflation and government debt. Now the Santa Monica brokerage is expanding overseas – with a very different pitch.
Rosland last week opened an office in London with plans to peddle gold coins and bullion to British consumers. Marin Aleksov, Rosland’s chief executive, said the United Kingdom is a largely untapped market for gold brokerages, especially compared with the United States. Over the past few years, Rosland and other local firms, Goldline International and Lear Capital, have blanketed the domestic airwaves with ads, many of them featuring prominent conservatives such as radio host Glenn Beck and former Nixon henchman G. Gordon Liddy. But there’s been no such blitz in the past in the United Kingdom, Aleksov said, and figures from a gold industry group show investing in the metal is not popular there. Aleksov thinks he can change that.
“It’s just an awareness issue,” he said. “We’ll try to increase awareness by buying advertising in print, radio, TV and other media so everyone has information on how to do this.”
Aleksov said his U.S. sales have fallen over the past few years as the appetite for gold waned, but he believes there’s pent-up demand in the U.K.
Rosland’s London office opened July 7 with a staff of about 30, and Aleksov said he’s already planning on hiring as many as 20 more by the end of the year.
American retail investors bought $3.1 billion in gold coins and bars last year, down from the recent peak of $4.2 billion in 2010, according to the London trade group World Gold Council.
The council reported that there was essentially no demand for gold coins and bars among retail investors in the United Kingdom. Though London has long been a global hub for the wholesale gold trade, only a few dozen small retailers sell gold coins to collectors and investors there, Peter Tulupman, a spokesman for the council said in an email to the Business Journal.
He also said British investors simply don’t think of gold as an investment asset.
‘Rich nuggets’
For Rosland, that lack of awareness could be an opportunity, said Kevin DeMeritt, founder of West L.A. precious metals brokerage Lear Capital. Aleksov worked at Lear before founding Rosland.
DeMeritt said Brits loved investing in gold a century ago and that, if Rosland can help renew that appetite, the firm could do well. He likened it to the old business adage of the two shoe salesmen who visit a third-world country for the first time.
“One calls home and says, ‘Nobody’s wearing shoes – there’s no one to sell to.’ The other calls home and says, ‘Nobody’s wearing shoes – this could be huge,’” DeMeritt said. “It could be a heck of an opportunity.”
DeMeritt also said there’s potentially more money to be made in the United Kingdom than in the United States when it comes to selling coins. Brokers such as Rosland and Lear typically sell gold coins and bars for about 5 percent above their market value. But rare and collectible coins can be sold with much higher mark-ups.
In the United States, those mark-ups top out at about 30 percent; but in the United Kingdom, dealers can charge as much as 50 percent, DeMeritt said.
“In the U.K. market, the margins are a little higher,” DeMeritt said. “That’s what Marin is doing. He’s there to sell commemorative coins and older issue coins.”
The British version of Rosland’s website confirms that thesis.
Rather than pitching gold as a hedge against inflation, as on its domestic website, Rosland’s U.K. site makes the case that gold coins are beautiful, historical artifacts – “rich nuggets of history” – that are perfect for collecting. The word “investment” never comes up.
Aleksov said Rosland will sell all types of coins in the United Kingdom, but agreed that British consumers are more interested in commemorative coins than in more common ones.
“You put the Queen on it, and they like it,” he said. “But we offer a variety of products. I’m not worried about the margins.”
