UltraDiamonds

Ultra Diamonds Files For Bankruptcy

Filed under: Jewelry

Another jewelry retailer is facing trouble. Ultra Stores Inc. which is the parent company of Ultra Diamonds, filed for Chapter 11 bankruptcy protection last week. The chain filed a "pre-packaged" bankruptcy with its vendors and banks and hopes to emerge from bankruptcy soon. The company will close 12 of its 181 stores and says it is facing a liquidity shortage. It operates Ultra Diamonds and Premier Fine Jewelry stores as well as running licensed departments in Burlington Coat Factory and Filene's Basement stores.

Ultra has said that its sales decreased 10.8 percent for year ended February 1, 2009, which factors in a drop of 18.9 percent during the winter holiday season. Ultra will operate as a "debtor-in-possession" during the Chapter 11 proceedings, which means that it will mostly be business as usual for the chain. The company is listed as as having $10 million to $50 million in assets but also $10 million to $50 million in liabilities. It has secured $30 million in financing.

UPDATE: As of July 28, Ultra Diamonds has emerged from Chapter 11 bankruptcy protection. It plans to close 30 locations. Crystal Capital will assume 56 percent ownership of Ultra in return for converting half of its debt into equity.

Other jewelry retailers Fortunoff and Robbins Brothers filed for bankruptcy this year but in those cases the situation was a bit more dire. It looks like Ultra should see its way out of this one.

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Tags: jewelry, ultra diamonds, UltraDiamonds