Off-rate retail pioneer Century 21 Retailers submitted for bankruptcy on Thursday with a program to near all its stores, citing the refusal of its insurers to go over its losses from the coronavirus pandemic.
The liquidation of Century 21’s assets by way of the Chapter 11 bankruptcy system would conclusion a operate of almost 60 several years for a enterprise that was established by the Gindi relatives in Bay Ridge, Brooklyn, in 1961.
The enterprise, which has thirteen stores largely in New York Metropolis and the encompassing metropolitan place, produced roughly $747 million of profits in fiscal 2019 but, like other vendors, had been strike hard by the pandemic, which forced it in mid-March to near all its locations.
Even with stores possessing reopened, Century 21 claimed it could no lengthier remain in enterprise because its insurers “have turned their backs on us at this most critical time,” declining to supply the $175 million it was seeking in protection for enterprise disruption losses ensuing from the pandemic.
“We are self-confident that had we been given any meaningful portion of the insurance policy proceeds, we would have been in a position to preserve thousands of work opportunities and temperature the storm,” co-CEO Raymond Gindi claimed in a information release.
Century 21 sued its insurers in July but CFO Norman Veit claimed the enterprise had to file bankruptcy in component to avert its landlords from pursuing eviction proceedings to judgment and/or seizing its stock to satisfy rents thanks.
“The debtors believe that [the bankruptcy] court docket can supply an expedited resolution of the insurance policy action that will generate sizeable proceeds and certainty for the debtors and their estates,” he claimed in a court docket declaration.
As New York Magazine reports, Century 21 was famed as “a price cut mecca: a treasure trove the place, if you were being prepared to shell out hrs digging (and perhaps get into a struggle), you could find a holy-grail luxurious item at one thing like ninety nine.ninety nine per cent off.”
But even before the pandemic, Veit claimed, it had been adversely affected by “the shifting of sales from traditional brick-and-mortar vendors to on-line vendors, and transforming purchaser choices.”