New York department store chain Century 21 is the latest retailer to file for bankruptcy. The company said that it will close all its stores, including five in New York City. The retailer said that the key element behind it going bankrupt was lack of payment by its insurers. Department stores have been struggling to survive even before the outbreak of coronavirus pandemic. But the COVID-19 crisis forced many to shut stores temporarily and focus more on online sales. Clothing stores like Century 21 have been hit hard by the pandemic as millions of people are not buying as many clothes as earlier. The reason is that some of them are jobless while others are working from home.
The company has issued a statement saying non payment of USD 175 million from business interruption forced it to file for bankruptcy. The retailer had filed for the amount under its business interruption insurance for the amount of revenue lost during the pandemic. The company said that similar payment from insurance company had helped it survive 19 years ago after the devastating terrorist attack. Thy retailer had a store just across the street from the World Trade Center and it was completely destroyed in the 9/11 attack. But the insurance money helped it to rebuild from scratches.
“This time we have no viable alternative and the only option left is to begin the closure of our beloved family business. This is happening because our insurers whom we paid significant amount as premiums every year to provide us protection against unforeseen circumstances like the COVID-19 pandemic we are experiencing today. The insurer has turned their back on us at a time when the company needed it the most,” co-CEO Raymond Gindi said. Gindi said that they would have been manage to save thousands of jobs had they received the meaningful amount from the insurer on time. The company in statement said that it is now going to sue several of its insurance providers. There are several reports that businesses both big and small are suing their insurance providers as they failed to provide coverage when they needed it the most.