Off-cost retail pioneer Century 21 Outlets submitted for bankruptcy on Thursday with a plan to close all its merchants, citing the refusal of its insurers to go over its losses from the coronavirus pandemic.
The liquidation of Century 21’s belongings by the Chapter 11 bankruptcy procedure would stop a run of practically 60 a long time for a business that was founded by the Gindi relatives in Bay Ridge, Brooklyn, in 1961.
The enterprise, which has 13 merchants typically in New York Metropolis and the encompassing metropolitan location, generated about $747 million of profits in fiscal 2019 but, like other retailers, had been hit tricky by the pandemic, which compelled it in mid-March to close all its locations.
Even with merchants owning reopened, Century 21 said it could no for a longer time keep in business simply because its insurers “have turned their backs on us at this most significant time,” declining to deliver the $175 million it was seeking in protection for business disruption losses ensuing from the pandemic.
“We are assured that had we gained any significant part of the insurance policy proceeds, we would have been able to preserve 1000’s of employment and climate the storm,” co-CEO Raymond Gindi said in a news launch.
Century 21 sued its insurers in July but CFO Norman Veit said the enterprise had to file bankruptcy in portion to avert its landlords from pursuing eviction proceedings to judgment and/or seizing its inventory to fulfill rents thanks.
“The debtors think that [the bankruptcy] courtroom can deliver an expedited resolution of the insurance policy motion that will generate major proceeds and certainty for the debtors and their estates,” he said in a courtroom declaration.
As New York Magazine studies, Century 21 was famed as “a lower price mecca: a treasure trove where by, if you have been eager to expend hours digging (and probably get into a battle), you could uncover a holy-grail luxurious product at some thing like 99.99 % off.”
But even in advance of the pandemic, Veit said, it had been adversely influenced by “the shifting of product sales from common brick-and-mortar retailers to on the net retailers, and modifying consumer tastes.”