Century 21 department store files for bankruptcy, plans to close all locations
New York department store chain Century 21 filed for bankruptcy Thursday and announced plans to close all of its locations, CNN reports.
The company has a total of 13 stores, mostly in New York City and surrounding metropolitan areas.
Since the start of the novel coronavirus health crisis, stores that depended on clothing sales, such as Century 21, have been hit particularly hard as millions of would-be customers are out of work and unable to make clothing purchases as they typically would. Those who are working, often do so remotely, meaning they have no need for work clothes from retailers.
Even national department store chains like JCPenney, Neiman Marcus and Lord & Taylor have filed for bankruptcy amid the pandemic.
Century 21 pinpointed the reason for its closure as the fact that it did not get $175 million it had filed for under its business interruption insurance. It said the policy had saved it in the wake of the September 11 terrorist attacks -- it had a store directly across the street from the World Trade Center, which was destroyed. But it said it has not been able to get the payment this time.
"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," said Century 21 co-CEO Raymond Gindi.
Many companies that file for bankruptcy use the process to shed debt and other liabilities and stay in business. But success stories in retail are more difficult and so, Century 21 said without the insurance money it believes it was owed, it makes sense to proceed directly to a liquidation.
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