New York based discount store chain Century 21 became the latest retailer to fall victim to the COVID-19 pandemic. The retailer announced last week that it filed for bankruptcy and will close all 13 of its locations. Century 21 said its financial difficulties were due to its insurers not paying the retailer the $175 million it was owed.
“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,” Century 21 co-CEO Raymond Gindi said in a statement.
Century 21 will take its insurers to court
The retailer finds itself among the thousands of businesses who are in lawsuits with their insurers due to non-payment. Insurance companies have said financial loss from the COVID-19 pandemic is not covered. Insurers noted that policies say there must be “direct physical damage” in order for claims to be paid out, according to The New York Times. Century 21 said its lawsuit that includes 11 insurance providers would be moved from New York State Court to Bankruptcy Court.
“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 stores are still open to serve its customers. The company will hold “Going out of business sales” at all of its New York, New Jersey, Pennsylvania, and Florida locations and on its website.
“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,” Century 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.
“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.”
Joe Dyton can be reached at joed@fifthgenmedia.com.
