Discount Legend Century 21 Files for Chapter 11
Off-price retail pioneer Century 21 Shops submitted for individual bankruptcy on Thursday with a strategy to close all its outlets, citing the refusal of its insurers to cover its losses from the coronavirus pandemic.
The liquidation of Century 21’s belongings by way of the Chapter eleven individual bankruptcy process would conclusion a run of nearly 60 many years for a organization that was started by the Gindi spouse and children in Bay Ridge, Brooklyn, in 1961.
The firm, which has thirteen outlets typically in New York Town and the surrounding metropolitan area, produced somewhere around $747 million of earnings in fiscal 2019 but, like other vendors, had been hit really hard by the pandemic, which pressured it in mid-March to close all its areas.
Even with outlets having reopened, Century 21 mentioned it could no for a longer period stay in organization because its insurers “have turned their backs on us at this most significant time,” declining to present the $175 million it was searching for in coverage for organization disruption losses resulting from the pandemic.
“We are self-confident that had we obtained any meaningful part of the insurance plan proceeds, we would have been equipped to preserve countless numbers of work opportunities and climate the storm,” co-CEO Raymond Gindi mentioned in a information launch.
Century 21 sued its insurers in July but CFO Norman Veit mentioned the firm had to file individual bankruptcy in element to protect against its landlords from pursuing eviction proceedings to judgment and/or seizing its inventory to satisfy rents because of.
“The debtors imagine that [the individual bankruptcy] court can present an expedited resolution of the insurance plan action that will yield major proceeds and certainty for the debtors and their estates,” he mentioned in a court declaration.
As New York Journal stories, Century 21 was famed as “a low cost mecca: a treasure trove exactly where, if you had been willing to commit several hours digging (and it’s possible get into a battle), you could discover a holy-grail luxurious item at a thing like 99.99 per cent off.”
But even in advance of the pandemic, Veit mentioned, it had been adversely affected by “the shifting of product sales from standard brick-and-mortar vendors to on the web vendors, and transforming shopper choices.”
