DSGE shuts down Southern Bullion
Dallas – DGSE Companies Inc. has closed all locations in its Southern Bullion Coin and Jewelry division. As previously disclosed, six Southern Bullion locations were closed in February, and subsequently, four additional locations were closed in early April, and the final 13 locations were closed on or about April 21, 2014.
Following these actions, DGSE Companies 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. Management believes that closing these locations will result in profitable continuing operations on an annualized basis.
DSGE expects to report approximately $3.7 million in 2014 in non-recurring charges related to these closures. This includes approximately $2.9 million in expected write-offs related to the Southern Bullion trade name, approximately $400,000 in expected fixed asset write-downs, and approximately $500,000 in expected lease termination expenses, severance payments and other related costs. The inventory from the Southern Bullion locations will be utilized throughout the company’s remaining 12 locations.
“Closing Southern Bullion was a necessary decision, as these locations represented approximately 20% of our revenue, but approximately 70% of our operating loss,” said Dusty Clem, chairman and CEO of DGSE Companies. “The significant change in the precious metal markets, including a 30% 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.”
Supervalu names two new board members
Minneapolis — Frank A. (Terry) Savage and Mathew M. Pendo have been elected to the Supervalu board of directors, effective April 24. Savage and Pendo were both appointed to the board as designees of Symphony Investors LLC, under the terms of a tender offer agreement entered into with Symphony Investors and Cerberus Capital Management in connection with Supervalu’s sale of five banners to an affiliate of Symphony Investors.
Savage is currently a senior advisor to Lazard Ltd. and the former vice chairman of U.S. investment banking at Lazard. Pendo is currently a managing director at Sandler O’Neill Partners, a boutique investment banking firm focused on the financial services industry. The board now has 11 members, nine of whom are independent directors, including Savage and Pendo.
“Terry and Mathew each bring tremendous business and financial experience to the Supervalu board and we are excited to have them join,” said Gerald Storch, non-executive chairman of Supervalu.
Restoration Hardware names former Limited Brands exec to board
Corte Madera, Calif. — Restoration Hardware Holdings Inc. has named Dr. Leonard Schlesinger to its board of directors. He will also serve as the chairman of the board’s compensation committee.
Schlesinger has held executive leadership positions at various retail and consumer brands, including vice chairman and COO of Limited Brands from 1999 to 2007, and has served for more than 20 years as a professor of business administration at Harvard Business School, and previously served as the president of Babson College.
“We are thrilled to have Len join the board,” said Gary Friedman, chairman and CEO. “He is a true thought leader and we will benefit greatly from his wisdom and experience as we continue our pursuit of becoming one of the most innovative and admired brands in the world.”