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RAPAPORT... DGSE Companies Inc. has now closed all of its Southern Bullion coin and jewelry division locations. As previously announced, six Southern Bullion locations were closed in February and four additional locations were closed in early April. The final 13 locations were closed this week. DGSE will continue to operate 12 retail locations, including nine Dallas Gold & Silver Exchange locations in Texas, one Bullion Express location in Illinois and two Charleston Gold & Diamond Exchange locations in South Carolina along with Fairchild International, the company’s wholesale watch division. The Southern Bullion division will be reclassified as discontinued operations. During 2013, these discontinued operations generated a net loss of approximately $1.9 million. The remaining 12 locations, inclusive of all ongoing corporate overhead and public company costs, generated a net loss of approximately $800,000 in 2013, and, excluding $1.7 million in non-recurring charges, these remaining 12 locations generated a profit of approximately $900,000 in 2013. “Closing Southern Bullion was a necessary decision, as these locations represented approximately 20 percent of our revenue, but approximately 70 percent of our operating loss,” said Dusty Clem, the CEO of DGSE Companies. “The significant change in the precious metal markets, including a 30 percent decline in the spot price of gold, had a disproportionately negative impact on the customer traffic, transactional volume and ultimately the profitability of the Southern Bullion division. These stores were unable to make the transition from gold-buying shops to the full-exchange model that characterizes our successful operations in Dallas, Charleston and Chicago.”
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