New York-based department store chain operator Century 21 has filed for Chapter 11 Bankruptcy Protection, becoming the latest retailer to fall to the disruptions caused by the coronavirus pandemic. The company announced Thursday it will be closing down all of its remaining 13 locations in the northeastern U.S.
According to the company, it was forced to seek court protection after several of its insurance providers failed to cover roughly $175 million in policies. The amount would have been used to cover the company's losses after it was forced to close down its stores for several months at the height of the pandemic.
Century 21's joint chief executive officer, Raymond Gindi, said in a news statement the company really had no other viable alternative. He said the company had no other recourse but to immediately shut down after its insurers declined to pay the money it needed to continue operations. Gindi said the company had paid significant premiums every year to protect it from "unforeseen circumstances" but its insurers had chosen to turn their backs.
As a result of the failures, Century 21 will file legal action against several insurance providers. One of the company's insurers, The American Property Casualty Insurance Association, said the current pandemic was simply "uninsurable."
Century 21, which was established in 1961 in New York, is known for its affordable but fashionable clothing and accessories. The company operates several department stores in Florida, Pennsylvania and New Jersey. Before closing down its shops, the company said it would have a nationwide going-out-of-business sale to liquidate stocks. Its items will be available with big discounts at both its physical outlets and its online site.
The pandemic has brought down some of the country's best-known retailers. Other retailers that have filed for bankruptcy include Lucky Brand, J.C. Penney, Brooks Brothers and Ascena Retail.
