When we think about the world’s richest people, with net worths in the billions of dollars, it’s hard to imagine their fortunes going the same way as the average Joe who lands up with credit card debt.
I don’t even know how to process the idea of being in possession of billions of dollars (or rands, for that matter).
And, yet, the mighty fall, at times in pretty spectacular ways.
Carolyn Rafaelian’s jewellery company, Alex and Ani, first took off in 2004 when it produced a necklace featuring an apple for Gwyneth Paltrow following the birth of her daughter, Apple.
Fast forward to 2018, and Rafaelian was sitting with an estimated net worth of $1 billion.
Then, in 2019, according to Forbes, the cracks started to appear, when Alex and Ani filed a gender discrimination suit against one of its lenders, Bank of America, who had withdrawn its line of credit after a woman was named chief financial officer.
As a result, the company alleged, sales declined around $80 million after it failed to pay vendors, which in turn delayed product launches.
It also alleged in the suit that its valuation dropped by hundreds of millions of dollars, and that morale and employee productivity were hurt.
The lawsuit was dropped less than six months later.
In the ensuing turmoil, Rafaelian gave up 20% of the company, reducing her stake to 41% and increasing investor Lion Capital’s stake in the company to 59%. She soon stepped down as CEO and became chief creative officer, and was then fired from the role on May 8 of this year.
Enter a second lawsuit:
She filed a lawsuit against Lion Capital in June, alleging that it reneged on its promise to fund her new ventures. Lion Capital, which filed a motion to dismiss the suit, declined to comment about the lawsuit or Alex and Ani. The case is still pending.
In a short space of time, her net worth has plummeted from an estimated $1 billion in June 2018 to roughly $100 million today.
In a dramatic decline in fortune, Rafaelian went from gracing the cover of Forbes as their Richest Self-Made Women in 2017, with the company pulling in estimated revenues of $500 million, to posting a video on Instagram on October 13, 2020, stating that she would no longer be designing for the company, and would be striking out on her own:
View this post on Instagram
In the video, she says that she will be launching a new company called Metal Alchemist.
You don’t need to feel too bad for her, though – she still owns at least 12 homes, including large properties in Rhode Island, New York City, and Venice Beach in California.
Read her story in more detail here.
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