Attention, shoppers! Gold bars in Aisle Three!
Posted: Wednesday, October 28, 2009 8:31 AM
Filed Under:
London, England
By NBC News' Emily Wither
LONDON – It’s a gift they’re sure to treasure.
Customers flocking to Britain’s most prestigious department store, Harrods, this holiday season will now be able to add gold bars to their basket while shopping for the perfect present.
This latest arrival to hit the shelves comes in a range of sizes, from just under one pound to 27.5 pounds. There’s also a range of coins on offer, from British sovereigns to South African Krugerrands to American gold eagles.
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| AFP - Getty Images |
| A selection of gold ingots and coins for sale in Harrods department store. |
With new figures out last week showing Britain’s current recession as the longest on record, the strategy could be a successful one as up-market customers look for somewhere safe to put their money.
Chris Hall, head of Harrods’ bullion department, said the store saw a gap in the market.
"Up until now, London has had no well recognized name serving this market," he said. "Harrods saw the opportunity to help individuals buy physical gold in a prudent manner."
But the glittery metal probably won’t be flying off the shelves through the festive season. At today’s market prices, 2.2 pounds of Harrods gold will set you back about $35,000. And the top-of-the-line bar, which weighs in at 27.5 pounds, will cost you $429,482.
But Hall said sales had been promising, with several pieces of gold having been snapped up in the week or so it has been on sale.
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| Harrod's |
| Harrod's department store in downtown London. |
New demand
Outside Harrods, civil engineer Kishore George said he thought the store is a good platform for selling gold, "Harrods is not your normal department store," he said. "It’s the right kind of place to attract investors as some items in there are worth more than a gold bar."
Harrods regular Stephen Magri also sees a good fit. "I know a lot of people are buying gold for investment purposes so it’s a good idea as Harrods sells a huge variety of goods anyway."
Driving Harrods’ interest is the fact that demand for gold worldwide has jumped significantly since the start of the recession. According to Harrods Bank, the store’s private banking service, when they began to test the market they received "surprisingly emphatic demand from both gold investors and shoppers alike."
"Gold tends to do well in times of severe financial stress, as the last two years have shown, with gold rising 50 percent and more against all major currencies," said investment specialist Adrian Ash of the online gold trading company Bullionvault.com. "Gold outperforms cash during deflation, because falling prices and wages kill debtors, destroying both bank depositors and bondholders."
But purchasing gold is not as simple as carrying it home in one of the store’s signature green and gold bags. "Buying gold to hold in your hand gives you a headache," said Ash. "How to keep your gold safe without paying exorbitant bank-storage or home-insurance fees?"
Of course if you decide once you get home that your gold bar isn’t quite what you wanted Harrods is happy to accept returns at the current market price. They’ll also store it in the Harrods Bank.
Still, Rachel Wallbank was more interested in chocolate bars than gold bars when msnbc.com spoke to her as she was leaving Harrods. "I’m not buying bullion myself, we’re just picking up some Christmas presents from the food hall," said the human resources manager. "I don’t imagine a lot of British people will be buying [gold] but Harrods has a big international customer base with money to spend. So if it helps the economy it’s not a bad idea."
