Century 21 files for bankruptcy and will liquidate its 13 stores

COVID-19 has accelerated the crisis in face-to-face retail sales and Century 21 is the latest victim of the change in customs but above all of the closure of activities to stop the spread of the virus and the role of insurers during the crisis.

The discount mall announced Thursday its filing for bankruptcy and the liquidation of its 13 stores in New York, New Jersey, Pennsylvania and Florida. The company employs about 1,400 people, most of them in New York state.

Century 21, thus closing a 60-year history, has been an icon in lower Manhattan where it began its sales.

According to the company’s statement, the closure is due to the fact that the insurer will not make the payment of some $175 million that the company claims for business interruption due to the pandemic.

In September 2001, the insurer allowed the operations affected by the terrorist attacks in Manhattan to be reconstructed, which had a devastating effect on a shopping center located practically at the foot of the World Trade Center. Its reopening, then, was celebrated as one of the symbols of the recovery of a certain normality after the attack.

He got out of 9/11 but not COVID. Because now the situation is different. “Our insurers, to whom we have paid significant premiums for years to protect the business in cases of unforeseeable circumstances such as those we are experiencing today, have turned their backs on us at the most critical moment,” the co-author explained in a statement. company president Raymond Gindi.

All retail stores have suffered during the pandemic and Gindi explains that Century 21 has not been an exception “but we are confident that if we had received a portion of the insurance we could have saved thousands of jobs and contained this storm in the hopes to have another recovery”.

The company has filed a lawsuit against the insurers and is just one of more than 1,000 that have been filed across the country because insurers have refused to pay for business interruption insurance. In some states, such as California and Michigan, the judges are not agreeing with the plaintiff businesses and rule in favor of some insurers that are citing in some cases the absence of physical damage to the establishments, as occurs for example in the event of a natural disaster.

In light of the Century 21 situation, New York State Senator Andrew Gounardes said this was one more reason for Albany to pass a bill co-authored with Assemblyman Robert Carroll to require insurers to pay the money they rightfully owe their customers. “If a pandemic is not a legitimate business interruption, what is?”

Century 21 will kick off a higher-than-usual end-of-business sale, including on its designer-label products, in the coming days.

The JC Penney Rescue

The commercial landscape that the COVID-19 crisis will leave will be very different from what was known before March. Large firms, some already very vulnerable, have opted for the path of bankruptcy and liquidation like Lord & Taylor. Others have another chance. This is the case of JC Penney.

Two owners of malls in which this shopping center has important activities, Simon Property Group and Brookfield Property Partners, have agreed to invest some $800 million in the company (between liquidity and debt assumption). This would save 650 stores – it will lose 200 compared to the situation in March – and some 70,000 jobs, as explained in the court in which the company’s suspension of payments is being resolved.

Some financial firms, hedge funds and venture capital, will take over some distribution centers in exchange for the debt they have in the company.