Century 21 Goes Bankrupt
Century 21 Stores has gone bankrupt.
The department store announced today that it has voluntarily filed for Chapter 11 protection in the United States Bankruptcy Court for the Southern District of New York. It also filed motions to start going-out-of-business sales at its 13 locations across New York, New Jersey, Pennsylvania and Florida.
“Since 1961, when Al and Sonny Gindi opened what was then a small store in downtown Manhattan, we have been proud to provide shoppers with unmatched access to designer brands at amazing prices,” co-CEO IG Gindi said in a statement. “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.”
As part of the bankruptcy, Century 21 has encouraged customers to shop discounted designer wares at its stores and online at C21Stores.com “while merchandise selection is best.” It said that it has employed health and safety precautions to keep its outposts safe for both workers and shoppers.
According to the 60-year-old retailer, the decision to seek Chapter 11 protection comes after its insurance providers failed to pay roughly $175 million under certain policies that were put in place to protect against losses stemming from business interruptions — such as those experienced as a result of the coronavirus pandemic. (Along with the bankruptcy filing, the company is also pulling a lawsuit pending in the Supreme Court of the State of New York against several of its insurance providers.)
“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,” co-CEO Raymond Gindi said in a statement.
He added, “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.”
Century 21’s lenders have consented to the use of cash collateral, which is subject to court approval and would provide it with enough funds to continue operations during the store-closing process.
Both Raymond and Gindi said, “From the bottom of our hearts, we thank all of our dedicated and hardworking team members for their countless contributions, including continuing to give 100% throughout this pandemic to take care of our customers and each other. We will be forever grateful for the vital role they played in building the Century 21 legacy hand in hand with our family. Together, we hope we can help our loyal customers create some final memorable Century Stories.”
More from Footwear News
Sign up for FN's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.