Century 21, the well-known New York low cost retailer chain, grew to become the newest retailer felled in the course of the pandemic, saying on Thursday that it had been compelled to file for chapter and would shut all 13 of its places after failing to obtain cash from its insurers.
The retailer mentioned in a launch that its insurance coverage suppliers had not paid about $175 million due Century 21 “under policies put in place to protect against losses stemming from business interruption such as that experienced as a direct result of the Covid-19 pandemic.”
Raymond Gindi, a co-chief govt and a son of a founder, famous that insurance coverage cash had helped Century 21 rebuild after the Sept. 11 assaults 19 years in the past. Now, he added, “our insurers, to whom we have paid significant premiums every year for protection against unforeseen circumstances like we are experiencing today, have turned their backs on us at this most critical time.”
The chain, which has about four,000 staff and introduced in about $750 million in gross sales final 12 months, plans to wind down its retail operations and begin going-out-of-business gross sales on-line and in its shops in New York, New Jersey, Pennsylvania and Florida.
Century 21, which isn’t related to the actual property brokerage of the identical identify, was based in downtown Manhattan in 1961 by two cousins, Sonny and Al Gindi, and rapidly grew to become often called a vacation spot for designer items at discount costs. It was a pioneer of the now-ubiquitous off-price buying mannequin, which incorporates nationwide chains like Ross, T.J. Maxx and Marshalls.
With its tagline “New York’s Best Kept Secret” and a flagship retailer close to the World Trade Center, Century 21 grew to become a New York institution. The designer Zac Posen told The Wall Street Journal that the retailer had introduced him to shopping for fashion, saying, “I got some of my greatest and most cherished fashion pieces there,” and the store was a common reference in pop culture.
“The next day the verdict was in. Century 21, the downtown discount store, was the best part of jury duty,” the character Carrie Bradshaw said in a voice-over in one episode of HBO’s “Sex and the City,” as she ambled through the store.
“Century 21 stores represented the quintessential New York deal,” said Vincent Quan, an associate professor of fashion business management at the Fashion Institute of Technology, who advised Century 21 for many years. “It was the place to go for a deal on fashion merchandise and luxury goods.” He added that people could sometimes find brands like Armani and even Christian Louboutin there.
“Locals knew it, but tourists especially knew it and what it stood for,” Mr. Quan said. “It was known that tourists would come in with suitcases to go shopping in the store and fill them up, go on the plane and go home.”
Thousands of businesses have taken their insurers to court this year after learning that they would not receive insurance payments through their business interruption policies, because the fallout from the pandemic is not covered. Many insurers point to language in the policies that say for claims to be paid out, there has to be “direct physical damage.” Other policies have specific carve-outs for viral epidemics.
Century 21 said a lawsuit that named 11 insurance providers would be moved to Bankruptcy Court from New York State court.
“While retailers across the board have suffered greatly due to Covid-19, and Century 21 is no exception, we are confident that had we received any meaningful portion of the insurance proceeds, we would have been able to save thousands of jobs and weather the storm, in hopes of another incredible recovery,” Mr. Gindi, the co-chief executive, said in the release.
Century 21 joins a long list of prominent retailers that have filed for bankruptcy during the pandemic. They include Brooks Brothers, J.C. Penney, J. Crew, Neiman Marcus and Sur la Table. Lord & Taylor, another New York institution, which traces its roots to 1826, also announced plans to liquidate last month.
Century 21 said in an April letter to the Federal Reserve about the government’s midsize-business lending program that its business was in “serious jeopardy due to the economic fallout of the Covid-19 pandemic.” The retailer had been seeking amendments to the lending terms so it could have access to much-needed support.
“In stark but not unrealistic terms,” the company said, “the choices government makes on program eligibility will make the difference between bright, vibrant city streets and boarded up stores for the 2020 holiday shopping season.”
Contact Sapna Maheshwari at firstname.lastname@example.org.