Century 21 Files for Bankruptcy and Announces It Will Close All 13 Stores
The department store said the decision followed nonpayment on its business interruption insurance
Century 21 has filed for Chapter 11 bankruptcy, joining other department stores including JCPenney, Neiman Marcus and Lord & Taylor.
After offering designer apparel, footwear, cosmetics and décor at discounted prices for nearly 60 years, the chain retailer also announced it will be shutting all 13 locations in New York, New Jersey, Pennsylvania and Florida. The company said it will start liquidation sales in stores and online.
In a statement obtained by Fox 5 New York, Century 21 said the decision followed nonpayment on its business interruption insurance by approximately $175 million.
“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,” Century 21 co-CEO Raymond Gindi said in the statement.
The department store said it would have been able to “weather” the financial storm caused by the coronavirus pandemic, had it received insurance money it claims it was owed.
"While retailers across the board have suffered greatly due to COVID-19 ... 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,” Century 21 said in a statement obtained by CNN Business.
In April, Neiman Marcus became the first major U.S. department store to file for bankruptcy amid the pandemic. Others including JCPenny and Lord & Taylor have since followed suit.
At the time, David Berliner, partner at accounting firm BDO, told Forbes at the time that many fashion retailers were struggling before the global health crisis, so "with COVID-19 in the mix, it is really going to accelerate the trends with more store closures and ultimate failures."
“Bottom line, I expect there will be fewer retail chains surviving post-COVID-19 and the surviving chains, particularly apparel and other mall-based specialty stores, will reduce the number of brick & mortar store locations," he added.