I stand corrected. I just drove by the store now and it is closed, although it wasn't when I last did.
So why close the store, yet not report it as a material event, which is surely is? My theory is:
This was the Superior Gallery store that was relocated a few years ago. I believe the irregularities are related to the Superior purchase and I've heard from various sources that Superior was a cesspool. If the fraud was traced to this store, then either the tainted inventory transferred here and/or the personnel did. But I'd think that after 5+ years, all that inventory would have turned and be gone, and if it had been personnel, that they would simply have been fired.
However, the accounting irregularities went through Q3 of 2011. That says to me that personnel may not have turned over there and the fraud has been ongoing for a long time, and when they got a look at the inventory, they realized the fraud was still going on even now.
Thus, in the interest of public relations, better to shut the whole thing down and fire everybody. I look to Occam's razor -- the store shuts down within weeks of Williamson being let go. No mention of the store closure in a press release or an 8-K, which suggests that it is connected to the forensic accounting.
What does this mean going forward? The balance sheet may be affected from inventory issues, but NTR will simply inject more liquidity, probably in exchange for more equity.
On a purely intellectual exercise, I wonder exactly how these irregularities were perpetrated. Let's say you swap out a rare coin for the same coin in slightly less premium condition. Doesn't the buyer, after buying it, go and get an independent assessment? Or do they just proudly add it to their collection? Or maybe that coin just never sells. If you work at the store, you know what moves and what sits. Do you replace a coin that has never sold for years and nobody is the wiser?
Swap out a Rolex for a great copy. Does a Rolex buyer ever bother to check if the watch they bought is genuine?
Grab a diamond ring, replace the diamond with cubic, and the buyer never gets it appraised?
It would seem that kind of fraud would rely too heavily on the customer not appraising the purchase. Then what? Blame it on the person who sold DGSE the item?