December 10, 2008 / 12:59 AM / 10 years ago

Some find opportunity in Spain's crisis

MADRID (Reuters) - Beneath the clock in Madrid’s Sol square where Spaniards gather to count in the New Year, it’s an increasingly common sight: men walking around wearing sandwich boards or luminous jackets saying “I buy gold.”

Echoing images of men in sandwich-boards that encapsulated the hard times of the Great Depression, in Spain immigrants or people laid off from construction are picking up a small daily rate working as advertisers for pawnbrokers.

Whereas the Depression-era archetype often wore a raincoat and trilby and his board proclaimed his war service and hardship, the men in Madrid dress casually and advertise for bosses ready to buy gold and jewelry.

Besides pawnbrokers, cobblers, betting shops and cheap mobile phone services are doing a good trade as consumers become more thrifty and companies across most of Spain’s struggling economy slash jobs and investment.

In and around Madrid’s central, landmark square Sol, the men hand out leaflets and show potential customers the way to pawnbrokers’ premises, many of them in upper-floor flats.

“The other day a woman came by with a whole bag of gold,” said David Santos, a 38-year-old man wearing a sandwich board. “She said she had missed payments on her mortgage and was going to lose her house.”

“A business-owner came the other day with four Rolexes to pawn,” said Jose Bautista, a 45-year-old Dominican working nearby. “He got 18,000 euros. He did it to do the right thing and pay his workers.”

Walking advertisers are paid around 30 euros ($39) a day and do not get commissions, but with unemployment in Spain at almost 13 percent — by far the rate in the European Union, according to EU figures — many are willing to fill the posts.

“There are eight to nine of us in (Calle) Arenal, five in Montera, here there are three and on that corner there are two,” said Bautista.

He and Santos said some customers are gypsy families. Customers are paid 9-13 euros per gram, depending on whether they sell their gold objects outright or just pawn them: they get less if they want up to three months to reclaim the goods.

That price compares with a value for gold on world markets of about 19 euros per gram in early December.

“All classes of people come here,” said Santos, who used to work as a security guard on construction sites. “There are people who pull up in Mercedes who are very well dressed and have to pawn things and others who you say haven’t got two pennies to rub together, but they have gold.”


Shops buying second-hand goods are also doing well. So are cobblers, long spurned by Spaniards who just threw old shoes away and bought new pairs during the boom years, but now want aging soles repaired.

On the same Madrid square, people queue to buy tickets for Spain’s state-run lotteries. Unlike in some other countries where gambling has suffered as a more discretionary activity, these are also getting a fillip from the downturn.

As more Spaniards buy lottery tickets in the hope a win could make losing their job less of a worry, lottery prizes have reached record levels. In the first half of this year, just one of the state lotteries, the Primitiva, made sales of 1.9 billion euros, a 4.6 percent hike on 2007.

“I’m selling almost double,” said lottery kiosk owner Isabel Gonzalez whose family has run the kiosk since 1950. She has been selling tickets here for the last 11 years.

Mercedes Gonzalez, a 33-year-old property valuer in the queue, said she and her partner started playing the lottery a year ago: “It started as a joke with us. You say ‘oh well, if we lose our jobs, it doesn’t matter because we’re going to win the lottery.’”

Now they spend 15 euros between them a week on lottery tickets, hoping they can net a jackpot.

The largest win in the first half was a player in Granada who won 76.6 million euros in the “EuroMillones” lottery, one of nine state lotteries which include football betting and the traditional Christmas “Gordo” lottery.

Spanish gambling firm Codere also said its new betting shops Victoria, run under a joint-venture with Britain’s William Hill, were doing good business despite launching in a crisis.

The Victoria betting shops, the first of which opened in April, were the first in Spain after the Madrid and Basque Country regional authorities liberalized their betting laws.

The firm is aiming to close the year with 53 betting shops in the two regions.

“The shops are opening and clients are attending them in a massive way,” said Codere Managing Director Jaime Estalella, a board member of Victoria.

Unlike in Britain, where betting shops have tended to be associated with older men, Victoria shops have targeted women and men in their 20s and 30s in groups.

The venues have bars serving beer, wine and tapas and colorful stools and sofas where customers can watch screens showing sports like football, horse racing and basketball.

“Spain is a very sociable country and people are accustomed to finishing work and going to the bar with friends for a beer,” said Estalella. “Even in a crisis, people go to the bar and there they find our (betting) range.”


The Victoria shops are not the only start-ups. Last month, Dutch telecoms operator Royal KPN launched its cheap German mobile brand Blau, even as rivals such as Vodafone and France Telecom had said the slowdown in Spain was hurting their global performance.

In particular, Blau offers cheap calls to Latin American countries. KPN hopes the timing is right to convince cash-strapped immigrants and Spaniards to switch operators to cut their mobile bills.

In an age where mobile phones are increasingly perceived more as a necessity than a luxury, a budget mobile service could prove popular among Spain’s growth market of the moment — the unemployed.

“We are arriving at the right moment with a product to save (money),” Blau’s marketing manager in Spain, Miguel Angel Suarez, said at the Spanish launch of the brand, which started in Germany three years ago. “The (economic) crisis creates opportunities.”

Additional reporting by Judith MacInnes and Carlos Ruano in Madrid and Jan Harvey in London; Editing by Sara Ledwith

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