Spokane-based Pawn 1 Inc. has seen double-digit annual revenue growth in recent years, due to both a rise in existing store sales here and to its expansion into the Boise-area market, says Mark Lax, the company's president and majority owner.

The company also is looking to open another store here that would be modeled after its flagship store, and it plans to continue to expand in southern Idaho, Lax says.

The Pawn 1 chain operates 13 stores, having entered the Boise market in 2006, where it plans to open its fifth store in December. Its other nine stores are located in the Inland Northwest, including five in the Spokane area, three in North Idaho, and one in Lewiston.

"We knew we wanted to get into Boise when we did a business plan five years ago," Lax says. "We wanted five stores in five years, so we're right on track."

Pawn 1 is projecting its revenues this year will top $30 million, up from $5 million in 2000, he says. Its revenue growth in each of the last five years has soared into double-digit percentages, with the current year's increase expected to be 25 percent, Lax says.

The chain now employs 175 people, and its annual payroll is $5 million, he says.

About 60 employees work in the Boise market, at its stores in Boise, Caldwell, Garden City, and Nampa, he says.

Lax says he believes the Boise market will support a sixth store.

"We expect Boise to be as big for us as Spokane, with 125 employees and a big payroll," he says.

Pawn 1 also is looking for other potential southern Idaho locations in Idaho Falls, Pocatello, and Twin Falls, Lax says.

"I hope to open five more stores within a few more years," he says.

Lax says he also sees room for growth in the Spokane market. Within 18 months, the company plans to open a Spokane Valley store that will rival its north Division Street flagship store in size and inventory, he says.

The company is eyeing a few vacant structures along and near the Sullivan Road corridor for that store, Lax says.

Revenue growth, however, hasn't come just through new store openings, Lax says. "The Spokane store sales have shot through the roof," he says.

Lax says Pawn 1's flagship store, at 8014 N. Division, has been an extraordinary success since it re-opened a year ago, doubling in size to 15,000 square feet after taking over 7,000 square feet of adjacent space formerly occupied by a Magnolia Hi-Fi outlet.

"It's twice the size of any other Pawn 1 store," he says.

Pawn 1's two in-store brands—Dottie's Discount Jewelry and Music Corner—have increased mainstream awareness about the retail side of the company, Lax says.

"I always want to set some new standards for our customers, and get rid of the negative connotation associated with pawn shops," he says. "Pawn 1 is a place where anyone from an 18-year-old kid to a 65-year-old woman can feel comfortable getting a small, short-term loan."

The ratio of items people bring in to sell rather than pawn is about 30 percent, Lax says. That's up from a rate of 10 percent before the recession.

The default rate on loans has remained steady, however, at about 30 percent, he says.

"In a slow economy, people can't afford to replace what they pawn," Lax says.

Loans currently average more than $100, and the cost for a 90-day, $100 loan is about $25, he says, adding that rates and fees are regulated by state law.

"That might seem like a high percentage," he says. "I look at it as a service fee. As the loan value goes up, the percentage rate goes down."

In addition to the slow economy, another factor contributing to Pawn 1's revenue growth is historically high prices for gold and silver, which for many people is trumping sentimental value of jewelry, Lax says.

While Spokane pawn shops have to hold onto anything they purchase for 30 days per city ordinance, Pawn 1 turns the metals over to a Chicago refinery as quickly as is allowed, rather than try to anticipate a continued rising market, he says.

"We're not a commodities broker," Lax says.

Lax, who spent 20 years behind pawn shop counters, now leads Pawn 1 from administrative offices in a 2,200-square-foot building, at 2715 E. 31st. Lax bought the South Hill building four years ago and moved the corporate operations there from Old City Hall downtown, where they had been located for 12 years.

Lax, his cousin Mark Silver, and family friend Lewis Rumpler founded the company in 1994 and consolidated three pawn shops under the Pawn 1 name with a goal of taking a more corporate approach to the business and giving it greater public credibility. Lax and Silver bought out Rumpler's interest in Pawn 1 a few years later and Lax bought Silver's interest in 2002.

About 10 investors own a collective minority of the company, he says.

Despite recent high-trajectory growth, Lax says he still views Pawn 1 as a small, family business. "Growing from one store to 14 in 33 years isn't a fast pace, but it's bigger than I envisioned," he says.

Lax, now on the verge of turning 55 years old, says he aspired to be a journalist in his youth, but since he started working for his uncle at a pawn shop downtown in 1978, he hasn't left the business.

Now, Lax says he doesn't have to visit stores often.

"I've got a good operations team handling the daily business," he says. "They are some of the best. Some have been with the company for more than 20 years. My job now is to point the company forward."

When setting up a new store, Pawn 1 culls a selection of items from existing stores, so the new store can open its doors with a blended inventory with an at-cost value of at least $250,000, he says.

"We've got a full-time crew that pulls together inventory," Lax says. The crew also distributes inventory between existing stores to balance supply with demand at each store, he says.

For instance, Pawn 1 only sells firearms at two Washington stores, and moves most of its firearms inventory to its Idaho stores, because customers in Idaho generally are more comfortable seeing a variety of firearms in a retail setting, Lax says.

It's a constant challenge in the pawn business to encourage borrowers to bring in modern items, or ease back on their price expectations, he says.

"We can't take in every bicycle that comes out of a Walmart," Lax says.

The retail side of Pawn 1 strives to keep its inventory stocked with conventional items such as tools, electronics, jewelry, and musical instruments in good condition and value priced, Lax says. Customers, however, aren't likely to come across incredible finds like those often featured on the "Antique Road Show."

"This isn't a treasure hunt," Lax says. "We know what we're doing."