Local coin collector builds $1 billion firm.

A-Mark still keeps all its facilities in L.A. County

Operating out of its headquarters in downtown Santa Monica, A-Mark Precious Metals Inc. has grown from a small trader in rare coins and precious metals 30 years ago to L.A. County's 10th largest privately held company. The firm was also listed as the 147th largest privately held company in the U.S. in the Dec. 5, 1994 issue of Forbes magazine.

Furthermore, A-Mark, which first broke $1 billion in annual revenues in 1983, would disclose only that its 1994 revenues were "$1 billion-plus," indicating the company might deserve to be ranked even higher than 10th place on the Business Journal's List of largest private companies in L.A. County. Last year, A-Mark also reported "$1 billion-plus" in annual revenues, which earned it a ranking as the eighth-largest private company in the county.

Mark Albarian, director of A-Mark, said his company's high revenues do not necessarily translate to the bottom line because of the low mark-up margins in the rare coin and precious metals industry.

"Wholesale mark-ups on precious metals can be 1 percent or less, and mark-ups for retail can be as little as 1 to 3 percent," he said. Albarian also noted that whole sale transactions, with their razor-thin mark-up margins, comprise a larger share of A-Mark's overall business than retail, though he declined to be more specific.

In addition to wholesaling and retailing coins and precious metals - including gold, silver and platinum - A-Mark offers a range of services related to the precious metals business.

The company is also a "substantial" supplier of precious metals to L.A.'s downtown jewelry market, Albarian said.

"We buy from all over the place. We're distributors for most of the major world mints," he said, noting that A-Mark distributes gold coins from Canada, the United States and Australia.

Made in L.A.

A-Mark was founded in 1965 by Steven Markoff, a coin collector and native Angeleno who originally opened the firm as the A-Mark Coin Co. Markoff remains the company's top executive to this day, holding the titles of chairman and president. Albarian refused to specify Markoff's ownership stake in the company, and declined to answer any other ownership-related questions.

Despite its size, the company today consists of a surprisingly small number of facilities, all of them located in L.A. County.

A-Mark's headquarters are in downtown Santa Monica, as is Precious Metals Finance Corp., a wholly owned A-Mark subsidiary that helps customers finance precious metal purchases. Also in Santa Monica is Goldline International Inc., another wholly owned A-Mark subsidiary that sells precious metals and rare coins to the general public.

A-Mark's other wholly owned subsidiaries include: Superior Stamp & Coin, an auction company in Beverly Hills; and A.M. Handling Co., a downtown L.A.-based melt/assay facility for precious metals.

Albarian noted that even though A-Mark does business both throughout the United States and around the world, the company still has no permanent facilities outside L.A. County.

Interestingly, the entire work force for A-Mark and all its subsidiaries currently numbers only 89, which translates to an average of more than $11 million in annual revenues generated per employee. A-Mark's work force is the smallest of the top 50 privately owned companies on this year's List. The only companies with similarly low staffing levels are automobile dealerships.

While relatively small today, A-Mark's work force a year ago was a mere 45 employees - about half its present number.

Albarian said the doubling of A-Mark's work force this year followed the company's recent acquisitions of subsidiaries Superior Stamp & Coin and Goldline International.

Silver dollar bonanza

One of the highlights in A-Mark's 30-year history came in 1976, when the company purchased the LaVere Redfield silver dollar collection - consisting of 411,000 silver dollars weighing 11 tons - for $7.3 million in cash. The deal was the largest documented cash numismatic transaction in industry history, according to A-Mark' s soon-to-be published corporate brochure.

Another company highlight came in 1980, when A-Mark traded millions of ounces of silver when the price of silver had risen to a historic high of $50 an ounce. The time was a "profitable" one for A-Mark, according to Albarian. By comparison, an ounce of silver currently sells for between $5 and $6.

Albanian said that, while A-Mark buys large volumes of precious metals in various forms, the company is primarily a trader and, as such, does not stockpile its precious metal products for long periods.

"Most of our metals are traded, not held," he said, adding that speculative buying - the act of buying in anticipation of price increases - is only a "very small" part of A-Mark's overall business.

On the whole, Albarian acknowledged that A-Mark officials only speak to the public in general terms about the company's operations and its future prospects.

Accordingly, he declined to comment on A-Mark's ownership or provide specific details on the company's strategy for the future. He also declined to comment on whether A-Mark has any plans to go public.

"We're kind of protective with our information. We don't really seek any press, though we're happy to talk with the media," he said.