Century 21, the well-known New York low cost retailer chain, grew to become the most recent retailer felled in the course of the pandemic, saying on Thursday that it had been compelled to file for chapter and would shut all 13 of its areas after failing to obtain cash from its insurers.
The retailer stated in a launch that its insurance coverage suppliers had not paid about $175 million due Century 21 “below insurance policies put in place to guard towards losses stemming from enterprise interruption akin to that skilled as a direct results of the Covid-19 pandemic.”
Raymond Gindi, a co-chief government and a son of a founder, famous that insurance coverage cash had helped Century 21 rebuild after the Sept. 11 assaults 19 years in the past. Now, he added, “our insurers, to whom we’ve got paid important premiums yearly for defense towards unexpected circumstances like we’re experiencing immediately, have turned their backs on us at this most crucial time.”
The chain, which has about 4,000 workers and introduced in about $750 million in gross sales final 12 months, plans to wind down its retail operations and begin going-out-of-business gross sales on-line and in its shops in New York, New Jersey, Pennsylvania and Florida.
Century 21, which isn’t linked to the true property brokerage of the identical identify, was based in downtown Manhattan in 1961 by two cousins, Sonny and Al Gindi, and rapidly grew to become generally known as a vacation spot for designer items at cut price costs. It was a pioneer of the now-ubiquitous off-price purchasing mannequin, which incorporates nationwide chains like Ross, T.J. Maxx and Marshalls.
With its tagline “New York’s Greatest Saved Secret” and a flagship retailer close to the World Commerce Heart, Century 21 grew to become a New York establishment. The designer Zac Posen informed The Wall Avenue Journal that the retailer had launched him to buying style, saying, “I bought a few of my biggest and most cherished style items there,” and the shop was a typical reference in popular culture.
“The subsequent day the decision was in. Century 21, the downtown low cost retailer, was the most effective a part of jury responsibility,” the character Carrie Bradshaw stated in a voice-over in a single episode of HBO’s “Intercourse and the Metropolis,” as she ambled by means of the shop.
“Century 21 shops represented the quintessential New York deal,” stated Vincent Quan, an affiliate professor of style enterprise administration on the Vogue Institute of Know-how, who suggested Century 21 for a few years. “It was the place to go for a deal on style merchandise and luxurious items.” He added that individuals might generally discover manufacturers like Armani and even Christian Louboutin there.
“Locals knew it, however vacationers particularly knew it and what it stood for,” Mr. Quan stated. “It was identified that vacationers would are available in with suitcases to buy groceries within the retailer and fill them up, go on the airplane and go residence.”
Hundreds of companies have taken their insurers to court docket this 12 months after studying that they might not obtain insurance coverage funds by means of their enterprise interruption insurance policies, as a result of the fallout from the pandemic is just not coated. Many insurers level to language within the insurance policies that say for claims to be paid out, there needs to be “direct bodily harm.” Different insurance policies have particular carve-outs for viral epidemics.
Century 21 stated a lawsuit that named 11 insurance coverage suppliers can be moved to Chapter Court docket from New York State court docket.
“Whereas retailers throughout the board have suffered enormously resulting from Covid-19, and Century 21 isn’t any exception, we’re assured that had we acquired any significant portion of the insurance coverage proceeds, we’d have been in a position to save 1000’s of jobs and climate the storm, in hopes of one other unimaginable restoration,” Mr. Gindi, the co-chief government, stated within the launch.
Century 21 joins a protracted record of outstanding retailers which have filed for chapter in the course of the pandemic. They embrace Brooks Brothers, J.C. Penney, J. Crew, Neiman Marcus and Sur la Desk. Lord & Taylor, one other New York establishment, which traces its roots to 1826, additionally introduced plans to liquidate final month.
Century 21 stated in an April letter to the Federal Reserve in regards to the authorities’s midsize-business lending program that its enterprise was in “severe jeopardy because of the financial fallout of the Covid-19 pandemic.” The retailer had been looking for amendments to the lending phrases so it might have entry to much-needed assist.
“In stark however not unrealistic phrases,” the corporate stated, “the alternatives authorities makes on program eligibility will make the distinction between shiny, vibrant metropolis streets and boarded up shops for the 2020 vacation purchasing season.”
Contact Sapna Maheshwari at email@example.com.