Alex and Ani, the Rhode Island bracelet maker who once enjoyed growing popularity in the retail industry behind spirituality and charm bracelets, has filed for Chapter 11 bankruptcy.
The company, which had been mired in declining sales, lawsuits and internal strife, said it would continue to operate while working with creditors and restructuring during bankruptcy proceedings.
“In 2020, COVID-19 forced the company to suspend its major strategic growth initiatives, temporarily close stores and scale back operations in light of reduced in-store customer demand,” said Robert Trabucco , director of restructuring for Alex and Ani, in a statement. declaration. “By using the process in Chapter 11, we are able to ensure rapid and orderly sizing of our balance sheet and operations.”
Now controlled by a British private equity firm, Alex and Ani have between $ 100 million and $ 500 million in debt owed to hundreds of creditors, according to the filing with the U.S. bankruptcy court in Delaware. The company lists assets in a similar range.
The bankruptcy filing on Wednesday is the latest setback for Alex and Ani, who went from the Cranston startup to the brand conqueror a decade ago.
Founded in 2004 by Carolyn Rafaelian, a University of Rhode Island graduate in her father’s Cinerama jewelry factory, Alex and Ani sold collectible bracelets that would attach to inexpensive stretch charm bracelets.
In 2010, the company hired former State Senator Giovanni Feroce as CEO and over the following years it opened more than 100 stores across the country and bought a Super Bowl ad. Feroce abruptly left the company with a large part of its managers in 2014.
With the bracelets, Alex and Ani were known for their New Age philosophy and “positive energy” branding. Some products were blessed by a shaman before you go to the stores.
In 2017, Forbes ranked Rafaelian as the 18th richest self-taught woman in the United States, with a net worth of over $ 1 billion.
But it wasn’t long before deep cracks started to appear in the business.
In 2019, Alex and Ani were cutting costs and falling behind on supplier payments as sales fell.
In July 2019, Alex and Ani sued Bank of America, accusing the lender of gender bias and forcing the company into a “death spiral” by defaulting it on a loan.
Last year Rafaelian was forced to cede control of Alex and Ani to investor Lion Capital, who now controls 59% of the company, according to bankruptcy documents.
Alex and Ani no longer have stores in Rhode Island, but are headquartered at 10 Briggs Drive in East Greenwich.
Alex and Ani’s largest unsecured creditor – who owed $ 4.1 million – is the Carpionato Group, which owns the Chapel View shopping complex in Cranston, where Alex and Ani were once headquartered.
Alex and Ani also owe Brookfield Properties, owner of the Providence Place shopping center, $ 3.3 million; Providence Quality Spray Technologies $ 3.3 million; National Chain Company of Warwick $ 545,000 and the Town of East Greenwich $ 176,000.
The bankruptcy filing also lists at least two “charitable donations payable,” including $ 254,000 to the David Lynch Foundation.
“Our employees will continue to be paid as usual during this process. The company will seek to optimize its retail footprint, strengthen the e-commerce platform and focus on strategic wholesale accounts,” said declared Trabucco.
On Twitter: @PatrickAnderso_