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Jewellery brand Alex and Ani has filed a lawsuit against Bank of America, alleging it has been forced into financial trouble by the lender.
Jewellery brand Alex and Ani has filed a lawsuit against Bank of America, alleging it has been forced into financial trouble by the lender.

Alex and Ani fights legal battle

US-based jewellery company Alex and Ani is embroiled in a legal stoush with Bank of America, claiming the lender misclassified a payment in order to push the brand to default on a $US170 million loan.

According to a complaint filed in a New York court on 25 July, Bank of America granted the company the loan in 2016 to enable the purchase of a production facility. The bank then claimed the company defaulted on the loan in December 2018, however representatives for Alex and Ani said the company was not warned and that the decision had been made on a technicality.

As a result, Alex and Ani’s cash flow has reportedly been severely disrupted; it has lost access to its credit line and has close to $US16 million ($AU23 million) in outstanding payments on its books. It was also unable to purchase seasonal inventory, which, it has alleged, lead to a steep decline in sales.

“Bank of America’s actions… have sent a once-thriving American success story into a death spiral, with 1,500 jobs potentially in the balance”

Forbes estimated that the company’s sales had fallen by $US50 million to $US500 ($AU738 million) in 2018 and would total $US420 million ($AU619 million) in 2019.

“Bank of America’s actions over the past few months – starting with a made-up default, and culminating in a deliberate plan to starve Alex and Ani of credit from any source – have sent a once-thriving American success story into a death spiral, with 1,500 jobs potentially in the balance,” the court filing says.

Alex and Ani withdrew from the Australian and New Zealand market after failing to come to terms with distributor House of Brands and its CEO Karin Adcock. The Westfield Fountain Gate flagship store and eight kiosks across NSW, Victoria, Western Australia and South Australia were subsequently closed. It had around 100 retail stockists.

 

More reading:
Alex and Ani, House of Brands part ways
Alex and Ani hosts Aussie store launch party
Alex and Ani to open 9 stores before Christmas

 











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Sunday, 18 August, 2019 12:40am
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