It’s painful to see Rhode Island success story Alex and Ani file for bankruptcy
The news of Alex and Ani’s bankruptcy was somehow not surprising.
Her struggles have been well covered and founder Carolyn Rafaelian left a year ago, with a little push.
But it still left me with a pang in my heart.
Because I loved the story of the meteoric rise of this cool, entrepreneurial woman from Cranston.
There was a thrill of pride in 2017 when Forbes named her the 18th richest self-made woman in the country with a value of $ 1.2 billion. That same list included Oprah Winfrey, Facebook’s Sheryl Sandberg, and eBay guru Meg Whitman, but Forbes put Rafaelian on the cover as the most interesting story of all.
In many ways, she was.
Billion dollar tech companies are common today, but a jewelry unicorn?
The compelling part was the way Rafaelian projected his eccentric personality into his products, an all-American tale in the vein of Steve Jobs.
Like him, Rafaelian was a bit eccentric. She had a do-it-yourself approach, but it turned out to be the secret sauce for both. They put their quirk into their products.
After:Alex and Ani go bankrupt
Yes, Rafaelian had a great product: stretch bangles that you decorated with charms. But she made it clear that she was really selling something else.
It was the buzz that drove customers to buy.
Just as people wanted Apple products to be part of a “think outside the box” culture, Alex and Ani’s customers appreciated the promise of earthly balance.
It was really great. If you had given Rafaelian’s invention to 1,000 people and sent them to Shark Tank, 999 would have told you, “Let’s sell this expandable bracelet.”
Rafaelian said, “Let’s sell harmony with the universe.
From such a vision, we make great entrepreneurs.
Alex and Ani’s “killer app” – both psychologically and in terms of profit – was that people could add dozens of charms not only to show the bling, but to reflect who you are.
Owls, Evil Eyes, Friendship Symbols and hundreds more.
But behind each, Rafaelian threw an even deeper meaning.
This charm reflected here growth, this one for faith, others for strength, hope, protection or luck.
That took the company from around $ 2 million in sales in 2009 to half a billion seven years later.
And it all happened in Cranston.
After:Court documents: Carolyn Rafaelian no longer controls Alex and Ani
I loved this part of the story too.
And that she did it in such an unlikely area – jewelry, whose once huge imprint here had declined as dramatically as the factories in the Rust Belt.
Carolyn’s father, Ralph Rafaelian, owned one of the surviving local jewelry companies, a maker of trinkets like Liberty Bells and American flag pins.
This is where Rafaelian got the know-how and a factory.
But no one would say she just built on what was there.
This is what makes her a great American story. She reimagined the business, pivoting to the future – dramatically – instead of just being a steward of the past.
That made her a billionaire at 50, and she lived the role, buying a mansion in Newport, a vineyard and a house on Venice Beach, California. And many more.
There have been many analyzes of Alex and Ani’s decline. I won’t say “fall” because it’s always a big deal. Current owners say bankruptcy is recovering from the pandemic hit on retail store sales. And although she is now far from a billionaire, Rafaelian is still worth around $ 100 million.
Yet the business is not what it used to be, and there is no way to make bankruptcy a positive element.
Someday there might be a Harvard Business School case study of what happened, but some of it stemmed from the ups and downs after Rafaelian recruited another URI graduate. appointed Giovanni Feroce as CEO in 2009.
After:Feroce’s high life falls apart
He was the yin for his yang, a former Army Liaison Officer who once worked at Central Command with US Army General Tommy Franks, who oversaw the 2003 invasion of Iraq that chased Saddam Hussein.
Feroce’s hyper-ambitious marketing discipline – and his vision – was at the heart of Alex and Ani’s explosive rise. But in the end, his ego was as big as Rafaelian’s and his style the opposite. So they parted ways.
Feroce then founded a new watch and clothing company with the Benrus brand which he said would be worth $ 1 billion, but it imploded after a few early buzzes.
Obviously, this story has a lot of egos fallout.
Back at Alex and Ani’s, the issues behind Rafaelian’s famous quirk surfaced when ousted leaders sued, telling stories of business decisions made by tarot cards and spiritual advisers. There was a time when a shaman was hired to put crystals around Cranston’s seat and a claim from an astrologer was put on the board.
If Alex and Ani had continued to thrive, we undoubtedly would have bragged about such things in the same way Steve Jobs added to his legend by walking barefoot around Apple’s office, firing random people, and living. in a house without furniture.
But we can’t help but think that certain forms of eccentricity – even if initially the key to success – can go too far.
Like Icarus, Rafaelian’s Alex and Ani soared defying complacency, but were made to crash to earth when creative ambition turned into pride.