Diamonds & Engagement Rings News

A federal bankruptcy judge on Friday approved the sale of Boston-based Alpha Omega Jewelers, according to local media reports.

The troubled luxury jewelry and watch retail chain was sold to a consortium comprising of Tiger Capital Group LLC of Boston, The Gordon Co. of Ft. Lauderdale, Fla., and SB Capital Group of Great Neck, New York, the Boston Business Journal reports. U.S. Bankruptcy Court Judge William C. Hillman approved the sale Friday morning.

Under the agreement, the consortium will operate Alpha Omega Jewelers through the liquidation sale, the publication reports. Following the sale, the Natick Collection and Prudential Center stores will be re-merchandised and will re-open as part of the Ross-Simons jewelry chain. All of Alpha Omega’s current employees will be offered an opportunity interview for positions within the Ross-Simons organization.

The consortium is reportedly working with potential retailers to assume the leases of The Burlington and Cambridge locations, the publication reports.

It was reported previously that the consortium agreed to purchase the chain’s assets for $18.7 million, just over 70 percent of its value, from the LaSalle Business Credit arm of Bank of America Corp., which seized possession of Alpha Omega’s inventory on Dec. 22, a few days after the owner Raman Handa and their two grown children who work for the family business left the country without notifying relatives or business associates.

Company assets will be liquidated following a review of inventory, the publication reports. Court-authorized price reductions will be effective immediately. Alpha Omega’s entire multi-million dollar inventory of diamonds, fine jewelry, and watches will be targeted for immediate sale at all Alpha Omega locations, which are in Cambridge, Boston, Burlington, and Natick.

Liquidation sales at the four Alpha Omega watch and loose diamonds, jewelry store locations could begin as early as this weekend if a U.S. Bankruptcy Court judge approves the winning bid for the Cambridge company’s assets at a hearing tomorrow.

A joint bid by Boston-based Tiger Capital Group, the Gordon Co. and SB Capital was the top offer for Alpha Omega’s assets during an auction that ended late Tuesday. Court approval would allow them to buy Alpha Omega’s $18 million in assets for 70.25 percent of their cost value, or $12.6 million.

In addition, the three companies have agreed to pay $125,000 for Alpha Omega’s leasehold rights and intellectual property, which includes the Alpha Omega name, according to Michael O’Hara, Alpha Omega’s outside chief restructuring officer.

O’Hara was appointed after Alpha Omega filed for Ch. 11 bankruptcy protection earlier this month with $31.6 million-plus in debt, following failed attempts to supplement luxury watch sales by branching into higher-margin fine jewelry.

“While we are disappointed at the price that we were able to sell the company for, under the circumstances, we were not surprised by the value we got,” O’Hara said.

O’Hara said a tough retail climate and widespread publicity about Alpha Omega owner Raman Handa’s decision to return to his native India prior to his company’s bankruptcy filing - without notice to his financial advisors - and a $6.3 million inventory discrepancy stifled interest in the company’s assets.

Cranston, R.I.-based jewelery chain Ross-Simons has agreed to take over the leases of at least two of Alpha Omega’s stores, which are located in Boston, Cambridge, Burlington and Natick. Ross-Simons will operate the stores under its own name once the liquidation sales end, which is expected to be in May. It also has pledged to interview Alpha Omega’s 100 employees for jobs at the two stores and its other existing stores or headquarters.

Troubled Alpha Omega Jewelers is now missing more than its founders.

According to a complaint filed in Suffolk Superior Court by the jewelry chain’s chief creditor, $6.6 million of the Boston-area jeweler’s inventory cannot be found, The Boston Globe reported.

While it is unclear whether or not the missing inventory is a result of bookkeeping errors or theft, officials from other jewelry stores who asked not to be named commented to the Globe that it is difficult to lose track of such a large volume of inventory in a well-run jewelry store.

Evidence of the missing merchandise first surfaced in mid December when LaSalle Business Credit, a retail lending arm of Bank of America Corp. and the store’s chief creditor, filed the complaint, said the news source.

But, the litigation was placed on hold after about two weeks because the troubled jeweler filed for bankruptcy, the Globe reported.

In the meantime, a judge ruled on Jan. 4 that Alpha Omega could continue selling merchandise as the bankruptcy case moves forward.

An auction selling off the company’s assets is scheduled to take place around Jan. 24.

The missing merchandise is just the latest in a series of bizarre events to unfold at the once-prosperous chain.

News of Alpha Omega first surfaced in December, when founder and owner Raman Handa and members of his family abruptly left the country amid financial troubles at the company and Handa’s health issues.

Handa has been said to be receiving care in his native India and gave permission via e-mail for the company to file bankruptcy.

The Globe reported that it is not known when or if the Handas will return to the United States.

In the meantime, two consultants brought in earlier this year to help solve the company’s financial woes—Consensus Advisors LLC’s Michael O’Hara and Altman and Co. LLC’s Gordon Lewis III—are running the day-to-day operations of the company.

Its seven Boston-area stores remain open for business.

            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 12^th, 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.

After shutting it doors shortly before Christmas, and many rumors about the company shut down, Alpha Omega’s four stores all reopened before Christmas Day. The Boston Globe reported .

    The Handa family is no longer running the show , but it is expected that the struggling jewelry chain will soon change hands.          

    The reopening of the stores confused the employees for a couple of days. They were told at one point when the stores shut down that they no longer had a job.          

   A review of Alpha Omega financial record by the globe showed that Handa’s debts were mounting and on Dec.22, his bank took possession of the assets at his stores. 

          As of Thursday, Michael O’Hara was running the daily operations at the Cambridge-based company, though Handa and his wife, Nilma, remained directors of Alpha Omega. Michael O’Hara was an investment banker with a jewelry background.

Alpha Omega Jewelers issued a statement from that he left the country to receive medical treatments, a magazine reports.

      On Thursday,Boston’s blog spot for Boston magazine stated that it had obtained a copy of a letter from Raman Handa, issued by Robert Joy, the company human resources director.

                         ‘’The Alpha Omega Team,’’ states:           

‘’Raman has asked me to communicate to you last week he had taken ill and has traveled to India to seek medical attention and convalesce. We anticipate a quick recovery whereupon he will return to operate the day-to-day functions of Alpha Omega Jewelers.’’

          Handa had left the country on Saturday, although the memo states that Handa communicates with the company management and the office on a daily basis. He had asked his employers to continue working normal. Their was something strange about this because no one had been answering the phones at any Alpha Omegas four Boston locations on Friday.

        It had appeared that the companies website appeared to have been taken down; only a phone number to the company’s corporate head quarters in Cambridge, Mass., was still posted.There was no answer to phone calls at the corporate office and a message left for Joy by National jeweler was not immediately returned.

          Earlier this week there was trouble when employees arriving at the company’s headquarters were confronted by ‘’a consulting group working with the bank ‘’ they were asking many questions about the stores inventories but the group wouldn’t say who they were or which company they were from.