By 2010, some six years after its founding in 2004, Alex and Ani’s wire charm bracelets were a hit, steadily fueling sales for the following five years. But troubles began to brew in 2014, when top executives came and went at a rapid pace, disrupting the jewelry retailer’s momentum, according to court documents filed with the bankruptcy court of Delaware.
Founder and ex-CEO Carolyn Rafaelian, who owned the company until 2012 when she sold a stake to private equity, has agreed to a resolution of her own legal claims against the company and part-owner Lion Capital, pending the bankruptcy court’s approval. Under the agreement, she would also sell her remaining 35% stake, per the court files.
The retailer is swimming in about $127.4 million in outstanding funded debt obligations. The full effect of a 2019 out-of-court restructuring was stymied by a ransomware attack in February 2020 and then the pandemic. Alex and Ani already has a restructuring support agreement with its debt holders and equity sponsors for a financial and operational restructuring, which must be approved by the court, and is looking for a buyer. The retailer plans to keep operations going during the bankruptcy process, including stores “currently open;” about 25 remain closed due to COVID-19. Furthermore, the company says it will look to exit any leases deemed “uneconomic.”
via https://www.aiupnow.com
Retail Dive Staff, Khareem Sudlow
