Century 21 is the latest discount retailer chain to file for Chapter 11 bankruptcy.
Raymond Gindi, co-CEO of Century 21, announced that the discount retailer will be holding a going-out-of-business sale on its website and in its 13 stores located in New York, Pennsylvania, New Jersey, and Florida.
The company filed for Chapter11 bankruptcy in the Southern District of New York on Thursday. It listed assets and liabilities of as much as $500 million each in its bankruptcy petition.
Century 21 blames its insurance companies’ refusal to pay its “business interruption” claim worth around $175 million.
“While insurance money helped us to rebuild after suffering the devastating impact of 9/11, we now have no viable alternative, but to begin the closure of our beloved family business because 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,” said Gindi in a statement.
Gindi added that Century 21, like other retailers across the board, “suffered greatly due to Covid-19.” He further stated that the company “would have been able to save thousands of jobs and weather the storm” if the insurance company paid a significant portion of its claims.
Around 1,400 people will lose their jobs due to store closings.
Century 21 opened in Brooklyn in 1961. The discount retailer offers clothing, shoes, outerwear, lingerie, and a variety of accessories, including beauty products and home goods.
“While we wish that Century 21 could continue to be a must-see shopping destination for so many, we are proud of the pioneering role it has played in off-price retail and the iconic brand it has become. It has been a true honor for us to be part of the vibrant New York City fashion scene and to serve millions of locals, tourists, and celebrities, side by side,” said co-CEO IG Gindi.
Many traditional brick-and-mortar retail stores have been hit hard by the COVID-19 pandemic. There were already issues with the increase in online shopping.
Other major retailers that have filed for bankruptcy citing the COVID-19 shutdowns are J.C. Penney, Bed, Bath and Beyond, Brooks Brothers, Stein Mart, Tailored Brands, J. Crew, and Neiman Marcus Group.
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