Off-price tag retail pioneer Century 21 Merchants submitted for personal bankruptcy on Thursday with a approach to near all its suppliers, citing the refusal of its insurers to deal with its losses from the coronavirus pandemic.
The liquidation of Century 21’s belongings by the Chapter eleven personal bankruptcy method would end a run of just about sixty several years for a business enterprise that was started by the Gindi loved ones in Bay Ridge, Brooklyn, in 1961.
The business, which has 13 suppliers mostly in New York Metropolis and the encompassing metropolitan spot, generated somewhere around $747 million of profits in fiscal 2019 but, like other stores, had been hit tricky by the pandemic, which forced it in mid-March to near all its places.
Even with suppliers possessing reopened, Century 21 explained it could no lengthier continue to be in business enterprise simply because its insurers “have turned their backs on us at this most essential time,” declining to present the $175 million it was in search of in coverage for business enterprise disruption losses ensuing from the pandemic.
“We are confident that had we been given any significant part of the insurance policy proceeds, we would have been able to help you save 1000’s of work and weather the storm,” co-CEO Raymond Gindi explained in a news launch.
Century 21 sued its insurers in July but CFO Norman Veit explained the business had to file personal bankruptcy in element to stop its landlords from pursuing eviction proceedings to judgment and/or seizing its stock to satisfy rents due.
“The debtors believe that [the personal bankruptcy] court can present an expedited resolution of the insurance policy action that will generate major proceeds and certainty for the debtors and their estates,” he explained in a court declaration.
As New York Magazine reviews, Century 21 was famed as “a price cut mecca: a treasure trove where, if you had been willing to expend several hours digging (and possibly get into a fight), you could find a holy-grail luxury item at something like 99.99 p.c off.”
But even ahead of the pandemic, Veit explained, it had been adversely afflicted by “the shifting of revenue from regular brick-and-mortar stores to online stores, and altering shopper preferences.”