The downfall of Alpha Omega, which filed for Chapter 11 bankruptcy protection late Wednesday night with $31.6 million-plus in debt, proved to be owner Raman Handa’s decision to augment sales of luxury watches by delving into higher-margin fine jewelry, according to court filings.
The chain’s reputation as a watch seller rather than a traditional jeweler, along with “overly ambitious” acquisitions of jewelry inventory, forced Alpha Omega to take write-offs and mark down merchandise in the past two years, court documents state. Its inventory ballooned from $15.1 million in 2002 to $27 million this past fall, an investment that never produced commensurate sales.
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Tags: bankruptcy, chapter 11 bankruptcy, chapter 11 bankruptcy protection
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