Century 21 Files for Bankruptcy, Plans to Close All 13 Stores
- Sep 11, 2020
Century 21 Stores, the iconic Manhattan-based department store chain, has succumbed to the impact of the COVID-19 pandemic after nearly 60 years in business. The company has filed for bankruptcy protection and plans to shut down its 13 locations in New York, New Jersey, Pennsylvania and Florida, joining a string of larger department store chains that have gone bankrupt in recent months.
The family-run retailer, which was forced by state and municipal orders to temporarily shutter all its stores in mid-March, has a lawsuit pending against several insurance providers on the grounds that they failed to meaningfully compensate the company for its losses due to the crisis. Century 21 said that it was owed about $175 million under policies designed to protect against such business interruption.
“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 a statement.
Department stores struggle
The news comes in the same week that department store chain J.C. Penney announced it has struck a tentative deal to sell the company’s retail and operating assets to mall owners Brookfield Properties and Simon Property Group. J.C. Penney filed for bankruptcy protection in May.
Neiman Marcus, another department store operator, filed for bankruptcy in the same month. Lord & Taylor recently announced that it would close all of its remaining 38 stores, after the nearly 200-year-old brand filed for Chapter 11 at the start of August.
Century 21, which started life as a small store in Downtown Manhattan in 1961, has around 1,400 employees, most of whom are unionized, according to Bloomberg. The off-price retailer had reopened all of its locations by the end of July with new safety measures, but struggled with reduced traffic at its New York City, Philadelphia and South Florida locations.
Heather Feinmel, director of marketing and public relations for Century 21, told Forbes in July that the company’s flagship store at 22 Cortlandt St. in Downtown Manhattan had been very challenged by the slump in tourism as well as local office workers in the area.
The firm is voluntarily filing for relief under Chapter 11 and will remove a lawsuit against several of its insurance providers from the Supreme Court of New York to the U.S. Bankruptcy Court for the Southern District of New York, Century 21 announced.