Century 21 has added its name to the growing list of retailers crumbling under the weight of the coronavirus pandemic’s economic fallout.
The off-price department store chain filed for Chapter 11 protection today in the United States Bankruptcy Court for the Southern District of New York, listing the value of its estimated liabilities as equal to its assets in the range of $100 million to $500 million. It also filed motions to start going-out-of-business sales at its 13 locations across New York, New Jersey, Pennsylvania and Florida.
The 60-year-old retailer, known for its discount pricing on designer names such as Michael Kors, Burberry and Calvin Klein as well as popular athletic labels like Nike, Adidas and Reebok, owes hefty sums to several of its brand partners.
High on the list of Century 21’s creditors with the largest unsecured claims is PVH Corp. — parent of Calvin Klein, Tommy Hilfiger and other brands — which is owed $4.8 million, the second-highest claim. (No. 1 on the list is the CIT Group, a financial holding firm, owed about $5.9 million.)
G-III Leather Fashion is No. 3 on the unsecured creditors list with a claim of $4.2 million. Adidas, meanwhile is owed $1.2 million; Michael Kors is due $1 million; Zara is unpaid $908,514; and Hanes Brands has a claim of $783,855. Other fashion names for which Century 21 has an outstanding tab include Puma at $455,572; Nike at $431,046; and Cole Haan for $423,162.
Century 21 said its decision to file for bankruptcy came after its insurance providers failed to pay roughly $175 million under certain policies that were put in place to protect against losses stemming from business interruptions — namely those experienced as a result of the coronavirus pandemic.
“While insurance money helped us to rebuild after suffering the devastating impact of 9/11, 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,” co-CEO Raymond Gindi said in a statement.
The retailer joins JCPenney, J.Crew, Neiman Marcus and a host of other boldface retailers that have sought Chapter 11 protection since the global health crisis took hold in the U.S. in March. Those firms, however, have so far been able to stave off liquidation. Experts have speculated that J.Jill, Francesca’s and mall operator CBL properties could be among the firms to file bankruptcy next.