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May 17, 2010
Photos by Carina Altomonte
Jean Henri Lhuillier, president and CEO of the Cebuana Lhuillier Pawnshop companies, the largest pawn brokering chain with 4000 employees, serving 30,000 customers daily in over 1200 branches around the country
He is also president and CEO of Cintree Management Services, Cebuana Lhuillier Insurance Solutions, Netword Capital Ventures, Inc., Le Soleil de Boracay Resort, Inc., P& EL Realty Corporation, Just Jewels Diamond Boutique Corporation.
Add to that lengthy list: director of Enderun Colleges, DFNN.com, Hatchasia.com, Intelligent Wave Philippines, director and chairman of Global Restaurant Concepts (Philippine Franchiser of California Pizza Kitchen), and Exteriur Resources Worldwide, Inc.
It doesn’t end there. He is also former manager of the Philippine men’s national basketball team that won a gold medal in the 2003 Southeast Asian Games; team manager of the RP Davis Cup since 2004, and current president of the Amateur Softball Association of the Philippines.
I shouldn’t neglect to mention that he is also Honorary Consul of San Marino to the Philippines.
Finally, most importantly, husband to the former Bea Lucero (former Olympian, commercial model, and insanely popular host of a late ‘90s show called Teen Talk), and father to four impossibly adorable kids.
Here’s the question: What does Jean Henri Lhuillier not do?
We pried away the Pearl Business Awardee of the 3rd Aurelio Periquet, Jr. Business Leadership Awards from his multiple desk jobs to share with UNO readers the state of the local pawnshop industry, his passion for sports development, and the safest place to park your money in an increasingly uncertain global economy.
Pawning around
The pawnshop business is “the poor man’s bank.” Pawnshops exist to assist people with limited access to cash, especially in a developing country like ours. Because—aside from rural banks and microfinance businesses—what other cash access options do the poor have? There may be the five-six and other informal networks, but these networks aren’t regulated like the pawnshop industry.
In the local industry, there are a few big players and a lot of small players. Although the pawnshop business is profitable, it is extremely risky and competitive, which is why local pawnshop interest rates are slightly higher than those of other institutions. Over the past several years, we have a seen a growth spurt in pawnshops, but we have also seen many close down. It is a tricky business: you can charge high interest rates—anywhere from three to five percent. But, again, the risk factor is extremely high.
As for our business, we have maximized our network base to offer other services. Outside of the core business, our focus is on money remittances, which have helped us achieve double-digit growth and helped our network as well. On top of that, we also offer e-load cards, bills payment facilities, and non-life insurance. We have gone into related businesses because as the pawnshop industry grows and become more competitive, there is a need to offer more products to make each of your branches more “revenue-generating.”
Over the next several years, we are looking to focus on a few core products and financial-related services that cater to our client base. We will continue to focus and improve on our business so that, down the road, we can offer our clients even better interest rates and quicker service.
Customer service is not lip service
We have built ourselves as a “nationwide brand” but given the highly competitive nature of the business, being that comes with its own set of challenges. For example, there are “mom and pop” pawnshops that can appraise high, and offer lower interest rates. However, like I mentioned earlier, the risk factor is very high. Since we are a nationwide brand, we maintain the same interest rates across all our branches.
But our key strategy in keeping and growing our client base is customer service. We have been a big player in the industry for some time, and I firmly believe that our success is hinged on great customer service. Customer service is practically a mantra in our company—we practice good customer service with both our internal and external clients. Among our internal clients, we have numerous customer service campaigns between departments to maintain high levels of speed and communication. With our external clients, the company holds regular customer service days wherein we invite longtime clients. When I can, I even personally return their gold and jewelry back to them.
The gold mine
In running our business, I am fortunate that my father gave me the opportunity to run things the way I saw fit. On top of that, success in business has also been about luck. I’ve been very lucky to have selected the right people, that I grew the business the right way, and that I was able to invest in businesses that have done well.
Stemming from that luck, this success of the business has been a lot of hard work. We have been able to grow the business from a mom and pop operation into a professionally managed company with outlets nationwide. We have increased the network to a size that has made it more attractive for related enterprises to do business with us.
I count among my biggest business achievements the ability to change the mindsets of our employees in terms of how they see themselves in the company. I believe that our employees are proud to be Cebuano Lhuillier employees not only because of what we’ve done as a business, but also with what we’ve done in terms of socio-civic activities and sports. Our people haven’t only grown as employees and managers, but also as citizens.
A multiplication lesson
In terms of adding new businesses to my portfolio, I see it as something that I have to do. If I don’t aspire to do other businesses, I feel as if time is wasted. At the same time, these businesses allow me to have a grasp of many things. I may not be there full-time for all of the businesses, but I feel as if a part of me is everywhere. That’s the way I am.
Some of the other businesses that I am involved with have come as an investment play. I see the market niche. I see the business opportunity. That being said, you have to make sure that the right people run those businesses. At any case, I sit on the board on most of these other businesses and offer my inputs.
When selecting a business that you aren’t running, you need to make sure that: you thoroughly understand the business, and you are confident that the people behind the business can make that business grow. Every time I chose I a new business, I made sure I selected the right businesses, and those that have the opportunity to grow.
I spend close to seventy percent of my time with the core businesses, and the rest of my time with the rest. Admittedly, there are times I feel that I might have spread myself too thin. Fortunately, I’ve built a strong management team around me that I can rely on and whom I am in constant communication with.
A good sport
Sport has always been a passion of mine. I played Division 1 tennis in college for two years in the US and have been very active in the Davis Cup team since 2005. I competed together with the National Slo-Pitch team and am the president of the Amateur Softball Association.
I also have a passion for our number one sport: basketball. Aside from enjoying the game, basketball is a great advertising medium for a business like ours. I was the national manager of the SEA Games Basketball team that won the 2003 gold medal in Vietnam. When it was still active, I was one of the directors of the Metropolitan Basketball Association (MBA), and the owner of the Cebu Gems team. And, up until a year and a half ago, we had a team in the Philippine Basketball League (PBL)—the Cebuana Lhuillier-Pera Padala Moneymen—that competed for two seasons.
However, from a national perspective, there has been a lack of support for overall sports development. Fortunately, there are a lot of people already supporting basketball in the country. Even without the support of our group, basketball will still receive support. So I decided to focus on other sports that were not receiving much financial support. I wanted to help, because my thinking is “If you don’t help, who is going to help these guys?” There are so many other sports that I try to help, but again there is the issue of limited resources. So at this point, I am focused on softball and tennis.
Even when you lose, you win
I lived in the US for a good twelve years of my life, so I wanted to start a business over there. With my dad’s help, I started a marble fabrication business. I ran that business remotely for over a year, flying back and forth from the Philippines, until the business folded.
My failure in the marble fabrication business was probably the best thing that ever happened to me. I learned to fail. Learning how to fail made more cautious about doing business—I had to make sure that I was surrounded by good people instead of people who wanted you to think they were “good people,” and it takes time to build that confidence. When I first took over our business, I slowly but surely built a management team whom I could eventually trust with the strategic and operational mind-set of the company. I also learned that you cannot run a business remotely (laughs). And that if you want to succeed, you cannot do things sparingly. You need to put in 110 percent behind your effort. That’s when I decided to stay here permanently and never looked back
In the know
First things first: understand the business that you want to get into. Understand the detail. Understand the up- and downside of the business. Understand the competitive landscape of the business. From a strategic standpoint, ask yourself: is this business scalable? Can I bring it regional? Can I bring it national? You have to understand where you want to be in terms of the business. And lastly, from an emotional standpoint: Is this a business that you can be with 24/7? Is this a business that you can love?
If you are looking for good businesses in the country, then look no further than our population: we are ninety million plus people and growing. By 2013, we will be the eleventh most populous country in the world. Find a business that will cater to our numbers. I often encounter people who are looking for businesses that they can sell at the mall. But if you look at the entrepreneurs who have been successful in this country, these were people who are looking at what they sell to ninety million people.
There is a host of growing business opportunities out there. There are still niches in the Business Process Outsourcing, such as accounting and engineering that are largely untapped. As a country with a growing population, there are a lot of opportunities in the educational sector. You can develop niche educational businesses for certificate programs, training programs, associates, or even full-blown colleges. Lastly, there are opportunities in the food and beverage industry. There are businesses that have grown exponentially over the past ten years, like chicken inasal. I believe that food, if done right and for the right price, has the chance to grow just as exponentially.
As a pawnbroker, I would tell you to invest in gold. If you take a look at the price of gold today, it has risen a lot over the past year and a half. It is about a thousand dollars an ounce now. With all the uncertainty going on in the global economy, gold has always been a good hedge.
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