Off-price clothier Century 21 — a mecca for generations of fashion-minded bargain hunters — filed for bankruptcy on Thursday and said it will shutter all of its stores for good, blaming insurance companies that failed to pay up during the pandemic.
Known for deeply discounted designer goods, Century 21 has been a retail anchor for decades in lower Manhattan,  where it rebuilt its store across the street from the World Trade Center after severe damage from the Sept. 11 terrorist attacks.
The retailer said its 13 stores in New York, New Jersey, Pennsylvania and Florida will begin holding going out of business sales. The total surrender is coming despite pre-COVID plans to open three new stores, including a “premier” location at the American Dream Mall in New Jersey, according to a filing.
“People are shocked they are liquidating,” said bankruptcy attorney Joseph Sarachek, who represents a watch maker in the filing. “It could be that customer traffic is so, so down that they just don’t see a way out of it.”
The plan to shutter the chain for good likewise flabbergasted shoppers, who kvetched about the demise of the 60-year-old retailer on social media.

“Sad to see this legend shutter. I purchased so many iconic looks from Century 21,” wrote Twitter user Liz Lapp. “Anyone else remember rummaging through the bins for Prada and Gucci deals?
The New York-based company filed for Chapter 11 bankruptcy in federal court in Manhattan and it moved a lawsuit against its insurance companies to the bankruptcy court, the company said.

Still, bankruptcy experts are puzzled by the fact that the company does not owe more money to vendors, with the largest creditor — CIT Group — being owed $5.9 million and the second largest Phillips Van Heusen Corp. owed $4.8 million.

“It’s just not that large a sum,” Sarachek said. “There should be a solution, but the fact that the Gindis who are sophisticated, well-respected operators aren’t prepared to run a classic restructuring turnaround speaks volumes.”

But the business was facing pressure even before the bankruptcy, according to a court document.

Century 21 had “challenges over the past several years” because of declining foot traffic at its stores, particularly its downtown Manhattan flagship, which has seen fewer tourists in recent years, chief financial officer Norman Veit wrote in a filing. The company was considering a “strategic transaction” at the beginning of the year to restructure the company’s operations and finances, Veit said.

The discounter — which had revenues of $747 million in 2019 — defaulted on a bank facility in June and landlords started to get more aggressive about evicting Century 21, which had not paid its rents from April through August, according to Veit’s filing.

“The real problem is that the stores have been closed and there have been no sales,” said bankruptcy attorney Kenneth Rosen. “People go to Century 21 to pick through the racks of clothing – and you cannot do that online — which makes it very difficult to have a big e-commerce business.”
Century 21 is the latest iconic retailer to succumb to bankruptcy as the coronavirus continues to force lockdowns nationwide. Other recent Chapter 11 casualties have included JC Penney, Pier 1 Imports, Modell’s, Neiman Marcus, J.Crew and Brooks Brothers.