Luciano Manganella’s Final Sale

Let Luciano Manganella tell you something else: New York & Company wanted him out.

What a coincidence that not three weeks before he could cash in the $7 million, he was let go. “You have to really look at the whole picture. Thirty-seven, 38 years [with Jasmine], everything has been fine. All at once the whole world crashes down and nobody sees that there’s a large chunk of money.” When New York & Company called him into headquarters that day in late May to place him on leave, he had no idea, he says, what the meeting would be about. After the execs informed him of their investigation, they told him that until further notice he was not allowed to so much as walk into a Jasmine Sola store—his stores!—or attend any company gatherings. New York & Company wouldn’t say what he was being investigated for, he says, and he was angry and confused. He thought New York & Company felt he was doing a good job. After all, he says, it had rewarded his leadership two months earlier with a six-figure bonus.

Manganella says he didn’t learn exactly what he was being accused of until June 22, one week before New York & Company filed its official complaint against him. Sexual harassment? He would never make anyone uncomfortable; he wanted to welcome people. Giving compliments and being friendly were in his nature. He’s Italian, remember. Besides, commenting on looks is part of the fashion business, especially when you specialize in women’s clothing, especially when you are surrounded by women. Manganella identified with his female employees. “I always was like one of the girls,” he says. “I listened to their boyfriend story, their going-out story, their clothing story.”

Each of the women, he claims, had agendas for making their accusations. “They wanted to preserve their jobs and would stab you in the back to do it,” says Manganella. “If a new boss comes in and says they’ll [raise] your salary if you tell them things about your old boss, where is your loyalty?” In sworn testimony later filed in court, Manganella’s lawyer, Dan Rosenfeld, claimed that around the same time they revealed the allegations against Manganella, the accusers saw their status change at New York & Company. According to Rosenfeld, Maggie Wakeland, the Jasmine Sola buyer, would “tell you that, like Ms. Chichester and Ms. Burgess, since Mr. Manganella was terminated, she had been given some additional job perks. In her case, a new, more prestigious title, a raise and a new…compensations system.” New York & Company, in the same court documents, denies the allegations. None of the women returned calls seeking comment.

Many Jasmine Sola employees say that New York & Company quizzed only select managers, buyers, and merchandisers who had worked with Manganella. Had he ever said anything sexual or in any way inappropriate? Ever? Many of the resulting charges, Manganella says, were comments taken out of context; some didn’t happen at all, he swears. The accusations, he says, are the “most monstrous thing that ever happened to me.” In Sonia Bawa’s case, he says, the Kama Sutra incident came about thanks to a movie he’d watched on television. Some Jasmine employees were discussing films in the basement of the Harvard Square store. Manganella says he told them he had seen a nice movie, a love story. God strike him down, he says, if he ever said anything about Sonia Bawa doing the Kama Sutra with him. The allegations about him slipping his hands down the front of Bawa’s pants he finds outrageous. “I never touched anybody,” he says. “It’s absolutely untrue. I probably made a comment on the pockets, but I know exactly how to deal with a fit model…. I want to tell you something, I never, ever, ever, ever touched anyone.”

Donna Burgess, the HR rep who claimed he forced oral sex on her—her stories were untrue, too, he says. After her duties had been consolidated through the merger, he contends, he stood by her, ensuring that she had a job with New York & Company. But Burgess turned on him, he says, just as she has done with New York & Company, filing a complaint with the Massachusetts Commission Against Discrimination alleging that New York & Company failed to protect her from Manganella.

Liz Chichester? Manganella says he barely knew her. His wanting to take her to the French Riviera—Manganella is Italian. He vacations in southern Italy, Salerno, Positano, the Amalfi Coast. Why would he go to the south of France? He’s never even been there, and he’s not planning on going anytime soon. And Ksieniewic, whose allegations sparked the investigation? If she was so unsettled by his behavior, he wonders, why did she continue to spend time at his home for months after the supposed initial advances? Why would she agree to go to the beach with him? “Most victims of sexual harassment likely wouldn’t spend their time—their free time—with a harasser, on a beach, in bathing suits,” Manganella’s lawyer Dan Rosenfeld argued in a hearing later filed in court.

Looking back, Manganella says, it all fits a pattern. At every turn, New York & Company was trying to undermine him. Though Jasmine Sola launched nine stores in the fiscal year 2006, instead of trusting Manganella to run the business as he had successfully done for 36 years, the new owners put roadblocks in his way, court documents allege, denying him access to company bank accounts and excluding him for important meetings, as well as subjecting him to more-personal affronts like failing to give him the paperwork necessary for him to complete his taxes. New York & Company, the documents claim, also exercised its veto power over several real estate deals he had lined up for new Jasmine Sola stores in competitive malls, because, Manganella theorizes, prospective New York & Company outposts had previously been rejected from the same shopping centers. At the same time, he was pressured to accept new locations endorsed by New York & Company’s CEO, Richard Crystal.

Once, according to court documents, Manganella sat down with Crystal and some of his fellow executives in Crystal’s Manhattan office and told them how the New York & Company brand stores should be run. That’s just his way. He thinks perhaps Crystal considered him a threat and was looking for a way to dispose of him. “If New York & Company had come to me and said, ‘This is a situation we need to correct,’ I would have done whatever I could,” he says.

“Because this is my reputation.”

Let the arbitrators tell you something: Luciano Manganella gets the money.

The contract that Manganella signed with New York & Company contained a clause mandating that any claims of a major employment breach would be decided in arbitration. In November 2006, his firing was taken up by a panel of arbitrators in New York. During the ensuing hearings, Manganella’s four accusers all testified against him. Manganella’s attorneys, in turn, challenged the women’s credibility, pointing out that Burgess, for example, did not bring up the oral-sex allegation during her first conversation with the Stier Anderson investigator. At the time, she said Manganella had commented on her breasts and would try to kiss her on the cheek. The oral-sex bombshell had only come out when she was being questioned before the arbitrators.

In the end, the panel determined that Manganella had failed to comply with New York & Company’s policy on sexual harassment. “The women employees who testified in this proceeding were forthright, courageous, and wounded by [Manganella’s] treatment of them,” they stated. “He failed terribly as a leader.”

But even so, Manganella ultimately won the suit. The decision boiled down to the fact that New York & Company should have provided him with written notice of the allegations against him and allowed him 30 days to remedy his behavior. On that technicality, he was awarded his $7 million, plus legal fees.

Now let other Jasmine Sola employees tell you something: New York & Company, not Luciano Manganella, killed the stores.

Before the sale to New York & Company, there were virtually no official company policies in place at Jasmine Sola. No employee conduct handbook. No sexual harassment training. Manganella believed he knew best, and staffers kowtowed to their boss just to prevent his notorious screaming sessions. On any given day, he could stroll in to check up on your store, decked out in a hip designer outfit. At times he was friendly. Perhaps he would compliment your new Miss Sixty skirt. But it didn’t take much to spark his wrath. If Manganella saw something or someone he didn’t like, he would roar, throw merchandise off shelves, bring employees to tears. He was known to fire people on the spot.

But—a lot of his employees loved him. More than a dozen recall him fondly. Even the singular management style, even the risqué remarks, which many took to be merely a byproduct of his avuncular personality. “I don’t think he ever meant to harm, abuse, or make people feel uncomfortable. I didn’t care, and neither did most of the other girls,” says Denise Lucciola, a former manager. Adds a current manager, “Some of the girls that were testifying against him, I wouldn’t believe a word coming out of their mouths.” Though they weren’t surprised when they heard the allegations, the majority of the women who spoke for this story said they never themselves felt ill at ease around Manganella. (“I think one person got angry, and this was all blown out of proportion,” says his mistress. Their romance ended a few years ago—their spouses eventually discovered the affair—but she refuses to believe he would attempt on other women the advances that she herself ultimately fell for.)

Former Jasmine employees reminisce about the friendly staff culture, how they were encouraged to take on as many or as few hours as they wanted, how their boss, though maniacal, was always on call. “He really cared,” says Lucciola. “He was fun—fun and crazy. I’d work for him again in a second.” Manganella’s staffers also appreciated how quickly he promoted talent. “Jasmine was great,” says one manager at the Newbury Street store. “I went from associate to key holder in three months.”

New York and Company’s management style, by contrast, was resolutely corporate. After it took over, there were fewer sales associates, fewer managers, and a strict bureaucratic hierarchy. Most buyers and merchandisers were transferred to the New York headquarters. “You had to go through 90 people to get an answer for something,” says one former Newbury Street manager, “when you used to be able to just call up Luciano.” Most of the remaining associates and managers quit soon after the buyout. The cuts and the turnover kept Jasmine Sola employees from providing the customer service that had been a point of pride for the stores. “Luciano would have 30 people working with me on a Saturday,” says Lucciola, “but once New York & Company came in there would be three of us. It was impossible to control everything. Who’s going to watch the door? Who’s going to put things away? Who’s going to help the customers? They were so cheap that at this point, we were begging for people.” Where there was once a surplus of job applicants, by the summer of 2007 Jasmine was resorting to filling vacant positions by advertising with fliers.

The drastic change in merchandise also didn’t help. The formula that worked for the cheaper, mass-market New York & Company chain bombed when applied to Jasmine Sola. The new inventory was markedly inferior; under New York & Company’s buyers, the Jasmine label was sewn into scores of second-rate garments from new outside suppliers. Bargain brands more likely to be found at generic department stores poured in. The few big-name pieces left in the store were flanked by knockoffs of the same style, at low prices that were nonetheless not low enough to compete with new European megachains like H & M.

“They’d sell a Juicy Couture jumpsuit, for instance,” says Steve Simon, owner of local chainlet National Jean Company. “Then they’d have the same suit with a Jasmine tag for just 30 percent less. When Zara’s down the street—with hundreds of the same thing but for much lower price points—which are shoppers going to go for?”

But more than anything else, Jasmine Sola couldn’t work without Manganella. “That business wasn’t in [New York & Company’s] DNA,” says equity analyst Samantha Panella of Raymond James, who tracks the apparel industry.

To loyal Jasmine Sola customers, the imminent closing of the Boston institution seems surreal. There are Facebook groups devoted to saving the store. “I have customers coming in asking, ‘Are you closing because of the sex scandal?’” says a current manager at the Newbury Street location. “And I laugh every time and say, ‘Uh, no. We are closing because of New York &
Company.’”

Let me tell you again: Luciano Manganella is a broken man.

His hair is grayer, his face more worn than when he last barked at store managers. “The rules have changed,” he says, welling up, as we sit in Abe & Louie’s. “I grew up constantly complimenting. I didn’t know that complimenting was wrong…in a lifetime there are a lot of things that happen.”

If New York & Company follows through on its planned February shuttering, it will bring the final twist of the knife. Closing will mean that whatever Jasmine inventory is left will be liquidated, and all of the clothes that Manganella loved and refused to hand to discounters will find their way to Marshalls and TJ Maxx. “They have destroyed my professional life, my stores…. They crucified me,” he says.

But Manganella is not completely without hope. Late last fall, he made a bid to repurchase Jasmine Sola. It seemed like the perfect solution: New York & Company would recoup some of its losses; he would revive the company that had been his whole life. After that offer was rejected, he tried again and early last month received a more receptive response; the deal, if it goes through, would let him buy back five Jasmine locations and start over. There’s also a countersuit he filed against New York & Company after his firing. Through it, he’s seeking to void a noncompete agreement he’d signed with New York & Company. Because if all else fails, Luciano Manganella has a vision for a new business.

He says he would like to open a lingerie store.

—Additional reporting by Rebecca G. Dorr