PROVIDENCE — Less than a year after Alex and Ani filed for bankruptcy, the Rhode Island-based jewelry company that grew into a billion-dollar business is getting a new leader.
Scott Burger, chairman of the company’s board, will take over as chief executive officer, confirmed Lyndon Lea, the cofounder of Lion Capital, which is the London-based investment fund that owns the majority of the company. Alex and Ani founder Carolyn Rafaelian left the company in October 2020.
Burger is currently the chief executive of Classic Brands, a mattress and sleep product design and manufacturing company in Maryland, where he reportedly helped double the company’s business. It is unclear when he might leave that role. Before joining Classic Brands, Burger was the president of Danish charm maker Pandora Jewelry’s Americas division.
He left Pandora in 2019, telling reporters at the time that he was looking forward to leaving the company to work at a smaller brand “on a growth trajectory.” Pandora executives told reporters that Burger was stepping down to “dedicate himself to new endeavors” after 10 years at the company.
During Burger’s early years at Pandora, the brand was one of the most popular jewelry companies in the United States. The Murano glass and silver beads strung on metal corded bracelets could be easily customized, and shop owners relied on the affordable products to help them get through the recession. In the 2000s and early 2010s, Pandora saw exponential growth in the market.
But around 2014, while Burger was CEO, Pandora began pulling its merchandise from independent jewelers across the United States and opening company-owned and operated stores to have more control over the products. Burger said in a 2016 interview that all retailers that carry Pandora should be “gold-level or shop-in stores.”
At the time, Pandora saw Alex and Ani as one of its largest competitors. In 2016, Pandora executives warned some of its independent retailers not to carry Alex and Ani. Alex and Ani executives sent similar warning letters to its wholesale accounts. But despite their similarities, their target audiences were different: Pandora steered toward older women with charms featuring licensed characters and designs commemorating motherhood, while Alex and Ani featured younger models in its ads, included information about zodiac signs on its packaging, and embraced spirituality. In recent months, Alex and Ani has touted its licensing agreements with characters from Peanuts, Harry Potter, and Hello Kitty, among others.
By 2020, Pandora CEO Alexander Lacik said focusing on its company-owned and franchise stores may have been a “poor decision.” And in January 2021, the company announced that the coronavirus lockdowns had forced it to close a quarter of its stores at the beginning of the year.
Before joining Pandora, Burger was an executive at Giant Food and Ruder Systems. He was also the chief financial officer of Dormia Inc., which was the precursor company of Classic Brands, from 2004 to 2007. Dormia filed for Chapter 11 bankruptcy protection in 2008, which had resulted in employee layoffs and store closures. Classic Brands was founded in 2011 after Classic Sleep Products, Inc., which was Dormia’s wholesale mattress manufacturing business, filed for bankruptcy.
Burger became chairman of Alex and Ani’s board in 2020.
And Alex and Ani, which received the green light from a Delaware judge for Chapter 11 reorganization in late September, had originally called to put itself up for sale and canceled an auction for Sept. 7 after no qualified bids were received.
The company’s new board, as written in its bankruptcy filings, would include five people, three of whom would be Lion Capital appointees — they are Lea; Sherif Guirgis, a principal of Lion Capital; and Burger. Lawrence Meyer, the board’s sole independent director and former CEO of Uniqlo (and who also served as a board member of Charming Charlie when it filed for Chapter 11), and Mark Geragos, a high-profile celebrity attorney, also serve on the board.
Majority owner Lion Capital is owed at least $115 million, according to court documents in the restructuring agreement. Lion took control of private equity firm JH Partners’s 40 percent stake in Alex and Ani in December 2014 for about $400 million, which valued the jewelry company at more than $1 billion. A former board member told the Globe recently that Rafaelian had wanted to bring in another potential partner that she hoped would buy JH’s share. But the Lion deal was made without her knowledge.
A source with direct knowledge of the deal said executives at Lion Capital never spoke to Rafaelian ahead of purchasing JH’s share.
Lion Capital owns 65 percent of Alex and Ani while New York-based Bathing Club LLC — which owns the Capri Southampton hotel and is controlled by Geragos, who has occasionally served as Alex and Ani’s outside counsel — controls about 35 percent of the company after buying out Rafaelian’s share.
Bob Trabucco, Alex and Ani’s interim CEO and chief restructuring officer, is a turnaround specialist and was installed as a contractor, according to a company executive. Trabucco previously served as the chief financial officer at Sterling Jewelers Inc. Burger will assume the role as CEO “immediately,” the executive said.
Much of Alex and Ani’s core brand can be tied back to Rafaelian’s vision, according to former and current executives. Under her leadership, the company became internationally known for its expandable wire bangle charm bracelets. It employed more than 1,000 people and sold nearly $10 million in bracelets, all of which were made in the United States.
But in a 2020 video that she posted on Instagram, Rafaelian announced from Belcourt of Newport, R.I., that she was no longer designing for the company that she had founded and named after her two eldest daughters. Rafaelian said in the video that she had started a new company called Metal Alchemist, where she planned on “continuing all the love and the efforts and designs that support things that are truly important to me.”