Luciano Manganella’s Final Sale

In 1996, after his third daughter was born, Manganella moved his family back to Boston. Two years later, with Jasmine Sola now really taking off, he opened a second store on Newbury Street. Correctly predicting the coming designer denim boom, he was the first retailer in New England to stock jeans by Seven and Citizens of Humanity; he was also among the first nationally to sell J Brand and True Religion, whose price tags can exceed $300. By the end of 2004, he had eight Jasmine Solas spread across New England, all in enviable locales, with plans to launch 12 more. He regularly checked up on each in person, ruled attentively, and intimately knew his inventory, his customer, and his staff. “He is a retail magician,” says Felicia Gervais, a real estate consultant who worked with the Jasmine locations in the Prudential Center and Chestnut Hill. “There are not many small storeowners left in the world who have his unique sense of what works.”

By this time, national clothing companies were showing interest in buying Jasmine Sola. In 2005, New York & Company (formerly Lerner) offered $20 million, a sum Manganella flatly rejected. Then Boston-based J.Jill put a more flattering $30 million on the table. Manganella was ready to sign when New York & Company came back dangling even better terms. With 490 national stores selling practical, inexpensive clothing, New York & Company saw the higher-end, trendier Jasmine as an opportunity to step into a profitable market without cannibalizing its own brand. On top of its base offer of $22.5 million, it added a sweetener: $8.1 million worth of stock for Manganella, and the promise of greater exposure for his chain. That same summer, Casual Corner—an inexpensive clothing chain not unlike New York & Company—was on the market, and rumors circulated that New York & Company would buy roughly half its 550 locations and convert some into Jasmine Sola outposts.

Manganella was vacationing in Positano, Italy when he received New York & Company’s pitch. He loved what he heard. And so on July 19, 2005, New York & Company had itself a deal. Under its terms, $7 million of the buyout package would be held in escrow, available to Manganella after one year. He’d also stay on as Jasmine Sola’s president, at a salary of $350,000. For a guy who’d poured much of his earnings back into his business, it was a heady payday.

Now let the six women tell you something: Luciano Manganella is a nasty old womanizer.

Ten months after the deal went through, a female Jasmine Sola staffer complained about Manganella to New York & Company. Three more soon came forward. In subsequent sworn testimony later filed in court, all four detailed how Manganella had sexually harassed them. While these were the first allegations brought to New York & Company’s attention, they did not represent the first time Manganella (who maintains his innocence in every case), had been accused of such misconduct.

In 1994, a 19-year-old named Sonia Bawa started working at the Harvard Square Jasmine Sola over holidays and summers. Three years later, she had a full-time position as a shop manager. Throughout the summer of 1997, she would later claim in a federal sexual harassment suit against him, Manganella often leered at her during his drop-ins to her store, telling her she had a great body. By December, she alleged, he was getting bolder, saying that if she wore a certain skirt he would visit her cash register more often. At the company holiday party, he made a big deal of kissing her goodbye on the cheek. Early in the New Year, according to Bawa’s suit, Manganella asked if she had ever seen the movie Kama Sutra. He said he enjoyed it because the women in it “were all about pleasing the male.” Then he asked, “Can you teach me the Kama Sutra?”

In July 1998, after Bawa put on a pair of pants to show a female buyer, and Manganella allegedly stuck his hands down the front of them, she decided she’d had enough. According to court documents, she phoned the Manganellas’ house one night and spoke to his wife, Stacey, who was then working as a buyer for her husband’s business. Bawa told Stacey she was considering resigning and asked to speak with Manganella. The following day, she repeated her request. But Manganella, she would later claim, was avoiding her. That day Bawa’s manager broke the news: Bawa was fired.

Bawa filed her lawsuit against Manganella in U.S. District Court in Boston in October 1999. Manganella says he settled out of court for $15,000.

Four years later, a second Jasmine Sola employee, Rachael Kennedy, hit Manganella with further accusations of sexual harassment, an unemployment claim. Manganella says he settled this matter out of court as well.

Though up to that point these were the only known sexual harassment allegations filed against Manganella, roughly a dozen Jasmine employees interviewed for this article say they can scarcely remember a time when whispers about his behavior were not swirling. That no other women came forward is ascribed by some to the way things operated in the company. “There was no clear hierarchy to go to if you had a problem,” remembers Bawa’s manager, Jeannie Dziama. And any woman who went to human resources would have found an audience with similar allegations to share.

Human resources director Donna Burgess was forced to perform oral sex on Manganella five times, the last in 2004, according to her sworn testimony later filed in court, after Manganella allegedly lured her to secluded locations, such as closed offices and a vacant construction site. Burgess didn’t feel she had any choice but to comply. “I was afraid of the way he was so volatile that if I told him no he would punish me by firing me or something worse,” she said in a deposition. During her testimony, she claimed Manganella told her she “gave the best blow job, even over my mistress.”

Lots of people in the office knew about the woman the boss was seeing on the side. Slim and fashionable, and possessing a distinctly European flair, she was hired as a Jasmine Sola sales associate in 1996 and quickly rose to buyer, the same position Manganella’s wife Stacey held. Another Jasmine Sola employee, Laura Ksieniewic, alleged in court that Manganella once gestured to her that he would slit her throat if she ever told New York & Company about his mistress.

Ksieniewic was Manganella’s girl Friday. She was like a big sister to his oldest daughter, even spending one Christmas at the Manganella home. “He would propose that we would have a sexual relationship,” she would later claim during a deposition. “He would make comments about my body. He would make comments about other women that worked for the company.” In the spring of 2006, according to Ksieniewic’s court allegations, Manganella brought her along on a jaunt to Miami. He called it a business trip, but it seemed to her more like an excuse for Manganella to enjoy a rendezvous with the mistress, who was waiting down in Florida. Ksieniewic claimed she felt nervous about the arrangement and wanted to keep her time with Manganella to a minimum, so she took a different flight. At one point during the trip, Manganella told her to speak to his wife on the phone and say he was “being good,” Ksieniewic would recall. Later Ksieniewic met Manganella in a hotel room, where, she alleged, he asked if she wanted to watch pornographic videos. According to her court allegations, he then proposed a threesome with the mistress; the women would get drunk and reenact the dirty pictures and videos. Ksieniewic was relieved when the mistress arrived shortly thereafter, and said she wished to be alone with Manganella.

Though not a member of his inner circle, another female Jasmine Sola employee, merchandiser Liz Chichester, alleged that in May 2006 Manganella invited her, too, on a personal trip to Miami, saying they could disguise the travel as work-related. According to Chichester’s court allegations, he also proposed a getaway to the French Riviera as well. When she told him no, Manganella allegedly took off his wedding ring. If the problem was his age, he said, “you can call me Uncle Luciano and everyone will think that you’re my niece,” Chichester would recall. She again refused the offer. Chichester would also later claim in court that Manganella once told her she was “fucking sexy.” On another occasion, he allegedly whispered in her ear, “Have you ever been with an Italian man?”

Now let the executives at New York & Company tell you something: They were blindsided by Luciano Manganella’s conduct.

Bought from the Limited in 2002 by a group of investors that included now-CEO Richard Crystal, New York & Company ran its business by accounting for every dollar and never spending a cent more than necessary. After going public in 2004 at $17 a share, it made Jasmine Sola its first acquisition. Not only did the Boston chain have a cult following and high-end wares that wouldn’t compete with New York & Company’s own namesake clothing, but it also had, in Manganella, a proven brand-builder at the helm. With the $7 million escrow payment in place, it had given him incentive to stay, and work for continued success. If things went according to plan, Manganella would grow Jasmine Sola while New York & Company provided the infrastructure, perhaps through the acquisition of Casual Corner. Win-win for all.

But almost immediately that strategy went awry. Casual Corner, the potential framework for Jasmine Sola’s expansion, was sold to a liquidator in August 2005. And as New York & Company took Jasmine Sola into other parts of the country, it found that the brand didn’t have the same cachet as it did in New England. The startup costs for its new locations weren’t insignificant, either. With those expenses straining the bottom line, less than 12 months after the acquisition New York & Company was making half of what it had the previous year.

On May 2, 2006, according to court allegations, New York & Company’s head of HR received a call from Laura Ksieniewic’s father, a lawyer. Ksieniewic had quit her job at Jasmine Sola on April 28 and was demanding severance, saying she had been disturbed by incidents that took place during her time working for Manganella. As the conversation continued, she relayed that Manganella had sexually harassed her.

New York & Company brought in DC law firm Stier Anderson to investigate the claims. After putting Manganella on administrative leave on May 25, the attorneys sat down with select Jasmine Sola managers, buyers, and merchandisers. These sessions, which played out over the course of a month, eventually produced the allegations by Burgess and Chichester, as well as an additional sexual harassment claim from Maggie Wakeland, a buyer.

On June 30, 2006, just 19 days before Manganella was to collect his escrow payment, New York & Company filed a claim in U.S. District Court in Massachusetts, alleging Manganella had committed a “major employment breach” by sexually harassing the four female employees; it also accused him of downloading “scores of sexually graphic images onto Jasmine computers.” For these reasons, New York & Company said, it was terminating its contract with Manganella. And since he was no longer employed by New York & Company, he was forfeiting the $7 million escrow payment.