Alpha Omega’s bad timing
Watch seller Alpha Omega switched to high end jewelry, but with lots of inventory and few customers he was soon on the road to bankruptcy.
‘’Raman Handa’s was an immigrant success story’’
After leaving India and opening a store in Harvard store almost three decades ago, he built his Alpha Omega Jewelers into a well-known chain by showcasing luxury watches from Rolex, TAG Heauer, and Mavado and enticing actors, politicians, and other celebrities to shop in his stores.
Later on in life he was temped by the bigger profit margins. He enjoyed the purveyors of fine jewelry.
Handa wound up stuck with unsold stock, according to documents filed in the US Bankruptcy Court this week that lay out details of the jeweler’s rise and fall. The value of the inventory soared almost 80 percent, from about $15.1 million at the end of 2002 to about $27 million in the fall of 2007- due to what now looks like an overly ambitious expansion into a new market.
Sales went from $35.8 million in 2006 to an anticipated $25 million in 2007.
Unpaid bills began pilling up lastspring.
As there livelihood began to unravel, the Handa family mortgaged their two-arce Lexington estate for $1.5 million last fall, in an effort to restructure Alpha Omega while seeking a buyer or investor.
Around December 12th, Handa admitted himself to a hospital, and a few days later he left the country with his family.( a step that prompted his banker)
The company owed more then $12.7 million to suppliers; other then creditors, including The Boston Globe is owed more then $1 million more. This is all according to the bankruptcy filling.
The inventory was estimated to be worth $18.7 million on Dec. 31. Which would mean the joint venture’s bid is worth about $12.1 million. The actual value of the inventory is expected to change as items are sold while the auctions proceeds.
Alpha Omega expects its stores to be open for business through the end of auction, which is tentatively slated for late January.
Acording to Alpha Omega, the top three creditors are Rolex Watch USA Inc., with a $1.46 million claim; The Boston Globe, $1.15 million; $1.15 million; and swatch Group U.S., $665,985.
“More than any other jeweler I’ve ever seen’’,said, Richard Caso, a manager at De Scenza Diamonds and a member of its advertising board.
Alpha Omega spent about $1.9 million on ads in 2006. Lawyers that are handling Alpha Omega cases said that they have been in touch with Handa with either phone or email since his departure, but since Christmas they have not received updates on his whereabouts or his timetable for returning.
Amit and Nidhi Handa, the son and daughter who hold senior positions in the family business, had traveled to England to meet with advisors about restructuring the company, according to the bankruptcy filing. Neither responded to interview requests left on their cell phones and sent online over the past week.
On Dec.21, Handa and his wife- the companies sole directors-gave their consent via email to appoint O’Hara as chief restructuring officer and file for bankruptcy protection. They also agreed to bring in inventory liquidation specialists, Tiger Capitol Group LLC, to sell the chain assets.
The new management reopened the stores over the next two days and rehired the 100 employees, who days earlier were told they were being laid off.