Alex and Ani Files for Bankruptcy Protection
Alex and Ani, the jewelry company that grew into a billion-dollar business, filed for Chapter 11 bankruptcy protection in Delaware on Wednesday. The company, founded by Carolyn Rafaelian, listed between $100 million and $500 million each in assets and liabilities, according to the filing. Its largest unsecured debts are with property management companies. It also owes the town of East Greenwich nearly $176,000 in taxes, the filing states. Robert Trabucco, Alex and Ani’s chief restructuring officer, said the company intends to continue operating its current open stores and its website “as usual” throughout the court-supervised process.
Total Retail's Take: It has been quite a fall in a short period of time for Alex and Ani and its founder, Carolyn Rafaelian. The jewelry startup quickly won over consumers, with its charm bangle bracelets leading the charge. Started online and selling its products wholesale, Alex and Ani expanded into brick-and-mortar retail, and seemed to be poised to join other brands such as Warby Parker, TOMS, Casper, among others, that grew from modest beginnings into household names in the retail space. However, declining sales, legal issues, including a lawsuit over losing its revolving line of credit, and increasing costs left Alex and Ani in a precarious financial position. According to Trabucco, filing for Chapter 11 will ensure Alex and Ani has an "expedited and orderly right-sizing of our balance sheet and operations." Whether it returns to its heyday of $1 billion in annual revenues seems much less certain.
Joe Keenan is the executive editor of Total Retail. Joe has more than 10 years experience covering the retail industry, and enjoys profiling innovative companies and people in the space.