February 2008
GIA Names Trépanier, Southern Africa MD
The Gemological Institute of America named Marie-Josée Trépanier as managing director, Southern Africa, effective Feb. 1.
Working in coordination with GIA corporate management, Trépanier will exist responsible for providing on-site project management and in-country guidance for the setup of new facilities and support functions for Southern Africa (South Africa and Botswana) and similar future projects. Located initially in Dubai, she will also supervise various business development projects in think highly of to ongoing business development.
Trépanier served most recently as chief executive officer for Polygon DMCC in Dubai, where she expanded the company’s presence in Dubai, Mumbai, Hong Kong, and China; and coordinated operations in the Middle East, Asian, and North American offices. Her background includes expertise in appropriate diligence, market research, strategy, and business planning. She holds an LLM in International Business Law from the London School of Economics, an LLB in law from the University of Montreal, and has served as a member of Team Canada Trade missions to China and Indonesia.
“Marie-Josée will be working with a highly experienced international GIA operations team, and we are looking forward to having her join us," said Donna Baker, GIA president. "She offers a solid combination of legal, financial, and operational skills demonstrated throughout her career in various executive and leadership roles. She brings an incredible wealth of erudition about regional and global areas of business to GIA. She has strong communications skills and operates with solid professionalism and ethics that has earned her the respect of colleagues around the world. She will substantially further GIA’s ability to expand and fulfill our global mission of protecting the public trust in gems and jewelry.”
Alpha Omega changes hands after owner leaves U.S.
Alpha Omega changes hands after owner leaves U.S.
February 06, 2008
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| Court papers state Amit Handa, left, and Nidhi Handa, right, traveled to England in December to help save the family business around the same time their father, Raman, center, left for India. But the company’s chief restructuring officer says he hasn’t heard from the Handa family. |
By Michelle Graff
Boston—After Alpha Omega Jewelers’ wild ride into Chapter 11 bankruptcy—a saga that included its longtime possessor leaving the country together a mountain of debt, millions in missing inventory and a shuttering of stores at the height of the holiday season—the Boston-based retail chain has been sold.
At press time, the U.S. Bankruptcy Court in Boston approved the sale of the chain to a consortium of three companies that entered the top bid for the assets of the jeweler, which filed for Chapter 11 three weeks earlier. Boston-based Tiger Capital, The Gordon Co. of Fort Lauderdale, Fla., and SB Capital of Great Neck, N.Y., can now go ahead on plans to liquidate the merchandise of the seven-store Alpha Omega chain and turn over control to new owners.
Cranston, R.I.-based Ross-Simons has agreed to assume two of Alpha Omega’s leases—one in Natick, Mass., and one at the Prudential Center in Boston. Other retailers were eyeing the Burlington and Cambridge, Mass., locations.
“Our immediate goal in spite of the company is to dispose of the current inventory so that the new owner can start with a clean slate,” The Gordon Co. President Philip Holden said.
This outcome came slenderly a month after the startling departure of Alpha Omega owner Raman Handa, who shocked employees and customers alike when he abruptly returned to his native India in December as the seven-store retail empire he spent the last 28 years creating was collapsing around him. Handa left $12.7 million in debt to the company’s creditors, more a mystery surrounding millions more in missing account.
Those familiar with the case say Handa tried to grow too much, too quickly, contemplation his success as a watch store would transform instantly into success in fine jewelry.
Bert Kalisher, executive director of the American Watch Guild, whose members include the nation’s top look sharp retailers, would not speak specifically on Alpha Omega, but says such transitions are tricky in any labor.
“It’s taste a steak restaurant all of a sudden becoming a fish restaurant,” he says. “It doesn’t happen.”
Ticking time bomb Filings from the U.S. Bankruptcy Court in Boston show that on April 25, 2005, Alpha Omega took out the loan that would become its financial undoing.
A Boston-area institution known for its selection of high-end watches, from Rolex to TAG Heuer, Alpha Omega was coming off a record-setting 2004, through sales soaring to $39.6 million. LaSalle Retail Finance, a division of LaSalle Business Credit Inc., agreed to a $15 million revolving loan and a $300,000 term loan for the business, with both backed by Alpha Omega’s assets and a guaranty of $500,000 by Handa and his wife, Nilma, Alpha Omega’s sole shareholders.
But some two years later, in May 2007, Handa and his wife were unable to meet the terms of the loans, that by then had been upped to a $16 million revolving loan and a $2 million entitle loan. The Handas began entering into a series of forbearance agreements with LaSalle to avoid foreclosure, court papers say.
At that point, the Alpha Omega owners hired crisis-management firm Altman and Co. of Stoughton, Mass., to “serve as a financial advisor and interim controller,” court papers state.
Altman Principal Gordon Lewis declined to speak with National Jeweler about the financial situation.
On Nov. 5, Handa sought further help, tapping Boston-based financial services firm Consensus Advisors.
Michael O’Hara, the company president, says Consensus Advisors was brought in to either find capital or a buyer for Alpha Omega, a goal it had reached at press time.
On Nov. 14, the Handas were forced to increase their personal guaranty to $1.5 million, using their Lexington, Mass., home as collateral, court documents show.
After Consensus Advisors had approached 40 parties interested in Alpha Omega, O’Hara says, one “very well-respected” jewels company, which he could not name, offered to invest $5 million on Dec. 11 to save Alpha Omega. Handa was excited about the deal and thought well of the potential investor, but he was personally distressed, O’Hara says.
“At this point, Mr. Handa was getting more and more stressed on the outside,” O’Hara says.
Sick leave Around Dec. 14, three days before a scheduled meeting between Alpha Omega leaders and the interested company, Handa was hospitalized, court papers say.
On Sunday night, Dec. 16, O’Hara was structure phone calls to confirm the location for the next day’s meeting when he made a shocking discovery: Handa was gone. His account of what happened next reads like a script for Mission: Impossible IV.
Altman and Co. immediately alerted LaSalle of Handa’s disappearance. Bank officials swooped into Alpha Omega’s Cambridge, Mass., headquarters to check the inventory in the safe and originate their worst fears were confirmed: Some $6.6 million worth of goods that was listed in the company’s inventory records was missing, court papers say. LaSalle shuttered the chain’s seven Boston-area locations and sent workers home.
“Nobody challenged them on that,” O’Hara says. “It was the right thing to do.”
After remaining closed without interruption Dec. 19 and 20, LaSalle agreed to reopen the stores’ doors, under one condition—that Handa not have anything to do with the company. At that period, O’Hara was made the chief restructuring officer.
At press time, the whereabouts of the Handas—and the $6 million in inventory—remained a mystery to staff and the legal system alike.
Court papers state that on Dec. 16, Handa went to India to “seek further medical treatments and to convalesce.” The papers also say Handa’s two children and nephew, who helped run the company, had traveled to England to join battle with advisors and work on a restructuring plan.
But O’Hara says he hasn’t heard from Handa or his family since mid December.
Fatal flaws in business While mystery surrounds Handa and the missing inventory, what went wrong with the business seems clear.
Court papers show that between 1997 and 2004, Alpha Omega’s sales nearly quadrupled from $10.4 million to $39.6 million as the retailer made its name known around Boston with one-day trunk and designer-jewelry shows.
Somewhere amid booming watch sales and earning a glowing reputation as one of Boston’s top corporate citizens, Handa decided to branch out into fine jewelry, which typically carries higher profit margins than watches.
“I think he thought he could make his business better,” O’Hara says.
As sales grew, so did the company’s inventory, which increased 79 percent between 2002 and 2007, from $15.1 million in value to a record $27 very great number, court papers show.
O’Hara, quoted in court documents as calling Handa’s jewelry project “overly ambitious,” says Handa bought too much inventory, too quickly.
He asserts that Handa bought the wrong merchandise, pieces that were overmuch low-end for his highbrow clientele.
In 2006, Alpha Omega reported sales of $35.8 million, and 2007 sales are projected at a dismal $25 million, down 37 percent from its peak.
Factors other than a glut of outstanding schedule played into the company’s downturn this year. Jewelers across the Northeast reported a terrible year amid a faltering U.S. economy, creating what O’Hara called a “perfect storm” for Alpha Omega, which was also unable to keep up its once-robust ad campaigns just as it was facing increased competition from other Boston-area jewelers.
The only bright spot: O’Hara says after an initial struggle, the jewelry portion of the business “is now more refined than it was in its inception,” court papers say.
Editor’s note: This story first appeared in the February issue of National Jeweler. For earlier developments in this story, see Alpha Omega market approved.
LVMH achieves record results in 2007
LVMH achieves record results in 2007
February 06, 2008
Paris—Luxury-goods giant LVMH Moet Hennessy Louis Vuitton (LVMH) reported an 8 percent increase in revenue for 2007 to 16.5 billion euros (about $24 billion), compared with 15.3 billion euros (about $22 billion) in 2006, the company announced today.
This become greater reflects organic growth of 13 percent at constant exchange rates to which every part of business groups and all regions contributed.
“The excellent performance in 2007 illustrates the vitality of our major brands, what one. continue to strengthen and gain market share,” LVMH Chairman and Chief Executive Officer Bernard Arnault said in a statement. “The year also confirmed the strong potential of our high-growth rising-star brands and the Group’s leading position in emerging markets. In an economic environment unsettled since the beginning of the year, we will rely on the strength of our growth model, the exceptional innovation of our brands and the talent of our teams to make 2008 another year of growth.”
Sales in the Group’s watches and jewelry sector increased 13 percent for the year (19 percent at constant exchange rates) to 833 million euros (about $1.2 billion), compared with 737 million euros (about $1.1 billion) in 2006.
LVMH credits the increase, in part, to TAG Heuer, which registered strong progress in all of its markets due to upscale positioning and continued radically new measure. Highlights of the year included the strengthening of its iconic lines Aquaracer, Carrera and Link, and the launch of two new watch innovations, the Calibre S movement and the new Grand Carrera line.
Zenith confirmed its position as a high-end watchmaker and successfully rolled out its new sports line Defy. Montres Dior benefited from the success of its Christal watch. Chaumet continued to expand its network, notably in Asia, and De Beers accelerated its store-opening program.
The Group, which will continue its strategy of concentrating on internal growth and the development of its leading brands, says it’s well positioned for 2008.
LVMH is a leading luxury-goods group representing watch and jewelry brands Chaumet, Christian Dior Watches, Fred, TAG Heuer, Zenith and De Beers Diamond Jewellers Limited, a joint venture created with the world’s leading diamond group.
PR firm Lup to represent Couture show
PR firm Lup to represent Couture appear
February 06, 2008
New York—Public relations firm Lüp LLC is the new agency of record for the Couture brand, the National Jeweler Network has announced.
Lüp will handle all public relations and communications for Couture, and will also work hand-in-hand with Couture decision-makers on expanding the brand outside of the traditional boundaries of a trade show, fostering the link between Couture and communities such as fashion, consumer media and the celebrity world, the firm said in a statement.
“The designs and brands that make up Couture are Couture’s greatest asset,” Couture Vice President Lee Arevian said in the statement. “We were looking since a confirmed that understood that we wanted to purchase the cumulative power of Couture to esteem Couture the go-to destination for all things haute design.”
Among the initiatives Lüp has in the works for Couture are a community blog and design-focused blog on the Web site Couture08.com, plus the social-networking site “Meet me at Couture,” newsletters, e-newsletters, uncommon events and promotions.
Lüp will also work with Couture to continue to construct edifices its international partner base, creating cross-promotional tie-ins with like-minded brands.
The New York-based Lüp has been in business for greater amount of than six years, connecting fine-jewelry designers with editors and costume designers. Jessica Cohen and Michelle Orman, who both serve in continuance the national board of the Women’s Jewelry Association, head the firm.
VaBene watches ‘good’ for Fashion Week
VaBene watches ‘good’ for Fashion Week
February 06, 2008
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| VaBene chronograph with disastrous bezel and bracelet. Suggested retail price is $265. |
New York—Watch brand VaBene teamed up with fashion designer Nicole Romano for her Fall 2008 runway show, held at Espace in New York City during Mercedes-Benz Fashion Week.
Watches from VaBene—which means “it’s all good” in Italian—were featured at Romano’s show, including a black chronograph with black bezel and a white chronograph with rose gold bezel. Both timepieces are acrylic.
Celebrity chef Rocco DiSpirito and Romano also sported the watches at the show.
For more information about VaBene, visit its Web site, Vabeneusa.com.
Battle for Rio Tinto heats up
Battle for Rio Tinto heats up
February 06, 2008
Hong Kong—Mining company BHP Billiton upped the stakes on Wednesday in its bid to buy Australian mining company Rio Tinto, various news services reported.
According to both Forbes.com and The Wall Street Journal, BHP Billiton urge out a bid value about $147 billion. BHP Billiton proposes to buy Rio Tinto at an exchange ratio of 3.4 of its shares for every Rio Tinto share.
grant that the act goes through, it would create a mining giant that would be the world’s third-largest corporation by market capitalization, after Exxon Mobil and General Electric, according to Forbes.com.
“This [offer] is very aggressive,” Tim Gerrard, a mining analyst at Austock Limited, told Forbes.com. “What BHP is saying is, we are very serious; we would launch a hostile takeover if necessary.”
A hostile takeover scenario would spring if 50 percent of Rio Tinto shareholders endorse the bid.
BHP Billiton, however, hopes that its high bid will convince Rio Tinto management, including CEO Tom Albanese, to bind in talks on the behave.
Rio Tinto remained seemingly ambivalent.
In a statement released steady Wednesday, Rio Tinto Chairman Paul Skinner uttered, “The boards of Rio Tinto will consider the terms of the proposal carefully in the light of all circumstances and will make a further statement once they have completed this assessment. In the meantime, the boards encourage shareholders not to use any action.”
The proposed BHP Billiton purchase of Rio Tinto has struck fear in developing countries such while China, where companies worry that such a deal would drive up prices for raw materials needed to sustain strong economic growth.
The New York Times reported on Friday that the state-owned Aluminum Corporation of China joined Alcoa in taking a 12 percent stake in Rio Tinto, an attempt to derail the BHP Billiton takeover.
Skinner called China’s move an “unsolicited development” that “reinforces our look on of the long-term value of Rio Tinto.”
“In line with our long-standing strategy, we shall continue to focus on operating our many world-class assets to maximize value and prospects for shareholders,” he said.
LVMH Watches & Jewelry Up 13%
LVMH Moët Hennessy Louis Vuitton Watches & Jewelry predicament sales increased 13 percent to $1.2 billion in 2007, led by strong growth in the TAG Heuer watch brand. When stripping away currency fluctuations, the company reported an organic revenue increase of 19 percent for the year, which the company said was "considerably better than that of the industry."
After having almost quadrupled in the jewelry and watch category for 2006, its profit from recurring operations grew through 76 percent, thus raising its current operating margin to 17 percent in 2007, LCMH said. TAG Heuer, driven by its upscale positioning and continued innovation, registered strong progress in all of its markets.
Other jewelry and watch highlights for the company included the strengthening of its iconic lines Aquaracer, Link and Carrera, and the launch of two new watch innovations, the Calibre S movement and the new Grand Carrera line. Zenith confirmed its position as a high-end watchmaker and successfully rolled out its new sports line Defy. Montres Dior benefited from the exceptional success of the be awake Christal. Chaumet continued to expand its network, notably in Asia. De Beers accelerated its store opening program.
Overall, the world’s leading luxury products group reported net profit for the year ended Dec. 31 rose 8 percent to pressingly $3 billion. Revenue grew 8 percent to $24.1 billion.
LVMH said its performance is even more noteworthy in view of the negative impact of currency rates, which mainly affected the second half of the year. The company reported a 12 percent increase to $5.2 billion. At constant exchange rates, profit from recurring operations increased by 20 percent in 2007.
Following growth of 30 percent in 2006, the Group share of net profit increased by 8 percent to nearly $3 billion in 2007. This increase is due to the change in net financial income, which in 2006 included a high level of capital gains on divestments.
“The excellent performance in 2007 illustrates the vitality of our major brands which continue to strengthen and gain market share," declared Bernard Arnault, LVMH chairman and chief executive officer. "The year also confirmed the vehement potential of our extreme growth rising star brands and the Group’s leading position in emerging markets. LVMH has showed record revenue in 2007 and has once again improved profitability. In an economic environment unsettled from that time the beginning of the year, we will rely on the brightness of our growth model, the exceptional innovation of our brands and the talent of our teams to make 2008 another year of growth.”
LVMH said it is "good positioned" for 2008 and will continue concentrating on internal growth and the development of its leading brands. The company set itself an "objective of a tangible growth" for 2008 based in continuance "the geographical spread of its activities, the strength and the complementarity of its brands and the abnormal talent of its teams will enable the group to gain market share and to further strengthen its escort in the global luxury goods market."