Century 21 Stores files for bankruptcy, blames insurers

Retailer said insurers denied business interruption claims worth $175M

National /
Sep.September 10, 2020 11:37 AM
Century  21 will wind down operations at its 13 stores (Getty)

Century  21 will wind down operations at its 13 stores (Getty)

UPDATED, Sept. 10, 12:40 p.m.: Century 21 Stores is the latest retailer to file for bankruptcy, and it blames insurance providers for its collapse.

The New York-based off-price retailer filed for Chapter 11 bankruptcy on Thursday and announced it will wind down operations to close its 13 stores across New York, New Jersey, Pennsylvania, and Florida.

The company said it was forced to file for bankruptcy after insurance companies declined to pay its business interruption insurance claims worth $175 million.

“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.

Increasingly, companies are filing lawsuits against their insurers, alleging they are owed money for business interruption claims caused by the pandemic. Insurers argue that most of the policies have exceptions for viruses. Courts, for the most part, have sided with insurers.

Some states, such as California, New Jersey and New York, have proposed legislation that would require insurers to pay these claims.

Century 21 filed for bankruptcy in the Southern District of New York. The company said it 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.

The company is planning a going-out-of-business sale at all of its locations and on its website.

Century 21 was founded in 1961 in Brooklyn. The store offers men’s, women’s, and children’s apparel, footwear, outerwear, lingerie, and accessories, along with beauty and home goods. Its locations include Manhattan, Brooklyn, Westbury, Rego Park, Valley Stream and Yonkers in New York; East Rutherford, Paramus, Elizabeth and Morristown in New Jersey; and Sunrise in Florida.

Traditional brick and mortar retail has been hit hard by the pandemic. Among the list of major retailers that have filed for bankruptcy are Tailored Brands, Brooks Brothers, J. Crew and Neiman Marcus Group, which is closing its anchor store in Manhattan’s Hudson Yards.

Nationwide, up to 25,000 retail stores could shut down this year, according to reports.


Related Articles

arrow_forward_ios
Before the pandemic, national tenants paid 94 percent of rent. (Getty)

Retail rent collections rebound to 90%

Retail rent collections rebound to 90%
(iStock)

Manhattan asking retail rents continue downward spiral

Manhattan asking retail rents continue downward spiral
Shake Shack CEO Randy Garutti (Getty)

Shake Shack to add 60 new locations this year

Shake Shack to add 60 new locations this year
Walmart suspends political contributions to GOP lawmakers who opposed President-elect Joe Biden’s election certification (iStock; Getty)

Walmart cuts off cash to pols who opposed election certification

Walmart cuts off cash to pols who opposed election certification
The Fat Sal's mascots from each coast. (Fat Sal's Deli, Fat Sal's Bar and Grill)

A tale of two logos: Restaurants in CA, NY battle over branding

A tale of two logos: Restaurants in CA, NY battle over branding
Restaurants argue Cuomo's restrictions are unconstitutional. (Getty)

70 restaurants sue Cuomo over “Kafkaesque nightmare” of regulations

70 restaurants sue Cuomo over “Kafkaesque nightmare” of regulations
A rendering of Moorestown Mall (Courtesy of PREIT)

Apartments, hotel to be added to Moorestown Mall

Apartments, hotel to be added to Moorestown Mall
(iStock)

Leisure and hospitality lost 500K jobs in December

Leisure and hospitality lost 500K jobs in December
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...