Off-cost retail pioneer Century 21 Merchants submitted for personal bankruptcy on Thursday with a prepare to near all its retailers, citing the refusal of its insurers to protect its losses from the coronavirus pandemic.
The liquidation of Century 21’s assets as a result of the Chapter 11 personal bankruptcy approach would stop a operate of almost sixty a long time for a business enterprise that was started by the Gindi relatives in Bay Ridge, Brooklyn, in 1961.
The firm, which has 13 retailers mainly in New York City and the encompassing metropolitan spot, generated about $747 million of revenue in fiscal 2019 but, like other merchants, had been strike hard by the pandemic, which compelled it in mid-March to near all its places.
Even with retailers having reopened, Century 21 reported it could no for a longer time stay in business enterprise since its insurers “have turned their backs on us at this most significant time,” declining to offer the $a hundred seventy five million it was trying to find in protection for business enterprise disruption losses resulting from the pandemic.
“We are assured that had we gained any meaningful part of the coverage proceeds, we would have been ready to preserve hundreds of work and climate the storm,” co-CEO Raymond Gindi reported in a news release.
Century 21 sued its insurers in July but CFO Norman Veit reported the firm had to file personal bankruptcy in part to prevent its landlords from pursuing eviction proceedings to judgment and/or seizing its inventory to satisfy rents because of.
“The debtors believe that [the personal bankruptcy] court docket can offer an expedited resolution of the coverage action that will yield significant proceeds and certainty for the debtors and their estates,” he reported in a court docket declaration.
As New York Magazine studies, Century 21 was famed as “a discount mecca: a treasure trove where by, if you were being willing to spend several hours digging (and maybe get into a fight), you could locate a holy-grail luxury item at something like 99.99 % off.”
But even ahead of the pandemic, Veit reported, it had been adversely affected by “the shifting of revenue from standard brick-and-mortar merchants to on line merchants, and altering purchaser choices.”