Century 21, the New York department store chain, filed for bankruptcy and said it will close its stores after nearly 60 years in business.
Century 21 has 13 stores mostly in New York City and the surrounding metropolitan area. As of Thursday, it had 1,400 employees.
In a statement, Century 21 said the decision follows nonpayment by the company’s insurance providers of approximately $175 million due to policies put in place to protect against losses stemming from business interruption such as that experienced as a direct result of COVID-19.
“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,” said Century 21 co-CEO Raymond Gindi. “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.”
The bankruptcy petition’s top-30 unsecured creditors list included a number of factors that insure credit accounts, including Cit Group, Wells Fargo And Rosenthal & Rosenthal.
In the active lifestyle space, vendors left with large unsecured claims included Adidas America, owed $1,184,130.73; Hanesbrands, the parent of Champion, $783,855.83; Puma North America, $455,572.62; and Nike Inc., $431,046.35.
The biggest vendors on the list were Phillips Van Heusen Corp., $4,769,123.45, G-Iii Leather Fashions, $4,154,816.86; and Peerless Clothing Int, $1,429,291.90. Other major brands on the top-30 unsecured creditors list were Levi’s, Michael Kors, Delta Galil, Haddad Brands, Theory and Cole Haan.
To accomplish an orderly wind down in the most efficient manner to maximize the value of its assets for the benefit of its stakeholders, the company voluntarily filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. Concurrently, the company is removing to the Bankruptcy Court a lawsuit pending in the Supreme Court of the State of New York against several of its insurance providers based on their failure to compensate the company for its losses under the policies. The company is requesting that the Bankruptcy Court expedite the adjudication of the suit for the benefit of its stakeholders.
“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,” said Century 21 co-CEO IG Gindi. “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.”
Raymond and IG Gindi concluded, “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 percent 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.”
Century 21 stores are currently open to serve customers. The company is commencing going out of business sales at all of its locations and at c21stores.com.
The company has filed with the Bankruptcy Court customary motions seeking authority to commence going out of business sales and uphold its commitments to customers and employees. The company’s lenders have consented to the use of cash collateral which, subject to Bankruptcy Court approval, will provide the liquidity necessary to support operations through the planned store closures.
Photo courtesy Century 21