Alex and Ani hurt by executive exits, party incident
Since 2004, Alex and Ani LLC has grown from a startup in Cranston, R.I., to a global jewelry retailer, thanks to the appeal of $24-and-up bangles and bracelets that are “made with love” and “empower the light in you.”
The company, which employed just 23 people as recently as 2010, now has about 1,000 workers, 46 stores, and several hundred “shops within a shop” at other retailers. Sales soared more than 5,000 percent to $230 million in the three years through 2013, according to Inc. magazine. (The privately held company has not released more recent figures.)
But behind the New Age marketing and the rapid expansion, Alex and Ani management has struggled with some decidedly negative vibes. It lost its chief executive and then its general counsel, both under contentious circumstances. It’s embroiled in nasty litigation with a former executive at a subsidiary. And earlier this month, a senior vice president was arrested and admitted to the theft of two jet skis from a Jamestown, R.I., estate during an early morning partying rampage.
The incidents generated unwanted publicity for a company known for its unconventional operations (there is a company-paid psychic and an astrologer on the board of directors) amid signs it may want to go public, including the hiring of a new president. Asked about a possible initial public offering of stock, founder and chief executive Carolyn Rafaelian told Bloomberg News last year, “I need to get the foundation as rock solid as I can before I make any moves that would make things even more exciting.”
Rafaelian declined to be interviewed, saying through a spokeswoman that she was traveling and unavailable.
Rafaelian launched the company in 2004 in a corner of her father’s Cranston jewelry plant and named it for her two eldest daughters. In 2010, with sales of about $4 million, she named Giovanni Feroce, a former US military officer and Rhode Island state senator, as chief executive.
Rafaelian referred to her partnership with Feroce as the merger of the “divine and the disciplined.” Rafaelian, 48, with long wavy hair and an artist’s demeanor, designed the bracelets, while Feroce led a team that brought the brand to a global retail audience.
As sales took off, Rafaelian was enjoying the lifestyle of a successful entrepreneur. She kept homes in Palm Beach, Fla., Providence, and Jamestown, and in 2012 bought an infamously neglected mansion in Newport known as Belcourt Castle.
But not everything went smoothly for the pair.
In late 2013, the company’s former general counsel, Robert E. Rainville, filed a wrongful-termination lawsuit, citing a hostile work environment. Rainville said he was promised company stock and a $1 million bonus after the company landed $70 million in funding from a San Francisco private equity firm. He was fired a few days before Thanksgiving.
Rainville, an unsuccessful candidate for Rhode Island attorney general, said in the lawsuit that he was cut loose after reporting misconduct by Feroce that included sexual discrimination, illegal drug use, and tax evasion. Rainville’s lawyer, Thomas A. Tarro III of Warwick, said that the case was settled for an undisclosed amount, and that a confidentiality agreement prevented his client from discussing Alex and Ani.
A few months after the lawsuit was filed, Feroce unexpectedly left the company, citing differences with Rafaelian about how fast the company should grow. Feroce said he signed a confidentiality agreement at his departure.
“The company’s success under my tenure was a direct result of the direction I gave,” he said, declining to comment further.
Rafaelian retook the helm as interim CEO.
In March, Michael Mota, a former executive at Alex and Ani’s media and advertising subsidiary, Seven Swords, filed a lawsuit against Rafaelian, alleging he was promised stock options he never received when the unit was abruptly shut down.
Mota said Rafaelian had directed Seven Swords employees to disregard or destroy invoices for work they had performed on behalf on Rafaelian’s other personal ventures, including her winery and chain of tea and coffee shops, as well as Belcourt castle, in an attempt to avoid state and federal taxes.
Mota’s lawsuit also listed a litany of complaints, including that he and other employees were forced to meet monthly with a company psychic, a “self-proclaimed Master Intuitive” named Jocelyn Coleman, who would report back to Rafaelian about their private lives. He said Rafaelian put on the company’s board an astrologer who picked the dates and times of store openings, slowing down the operation.
“This created a ‘cultlike’ environment, and it was known across the company that you were never to question or make comments about these practices or you would be terminated,” the lawsuit said.
Mota did not respond to requests for comment through his attorney, but his description of the company’s culture was confirmed by two former employees who did not want to be identified.
Alex and Ani responded by filing a lawsuit against Mota, claiming defamation, according to Mota’s lawyer. A spokeswoman for Alex and Ani said Mota was terminated during a restructuring of Seven Swords for reasons that included his “inappropriate and unprofessional management style.”
Yet more unwanted publicity came earlier this month when the company’s chief marketing officer was arrested after a night of partying in Jamestown. Ryan Bonifacino, 31, was partying at at a waterfront estate not far from Rafaelian’s at 266 East Shore Road. The Jamestown Police Department would not disclose the exact location of Bonifacino’s arrest. But the former hedge fund adviser and his friends took two jet skis, registered to one of Rafaelian’s neighbors, for a joyride to Newport in the hours before dawn on Aug. 3.
At some point, one of the jet skis crashed on a rock, and two riders were seriously injured. Police later arrested Bonifacino.
Bonifacino was ordered to pay for the damaged watercraft as well as $500 to the court’s victim compensation fund. He has not responded to requests for an interview.
In March, Rafaelian hired Harlan Kent, the former chief executive at Yankee Candle, as the company’s new president. Although no one can say what the future holds, under her creative control the company created a new line of products, and this summer the featured bangle bore a conch shell charm.
And like all the Alex and Ani bracelets, it is infused with meaning. This one is marketed to symbolize “Power. Authority. Sovereignty.”