Century 21, the 60-year-old luxury-goods discount chain with an expansive store in Philadelphia, said Thursday that it had filed for Chapter 11 bankruptcy protection and would begin to go out of business after it did not receive $175 million in business interruption insurance during the coronavirus pandemic.
“While retailers across the board have suffered greatly due to COVID-19, and Century 21 is no exception, we are confident that had we received any meaningful portion of the insurance proceeds, we would have been able to save thousands of jobs and weather the storm, in hopes of another incredible recovery," chief executive Raymond Gindi said in a statement, adding that the company’s insurers “have turned their backs on us at this most critical time."
Gindi said insurance funds had helped salvage the business after 9/11; one of its stores was close to the attack site. The company has 13 stores across Florida, New Jersey, New York, and Pennsylvania, in addition to offering online shopping.
Since it opened in Philadelphia in 2014, Century 21 has occupied 98,000 square feet at 821 Market St. in Center City. It anchors part of the Fashion District, a 900,000-square-foot indoor mall that opened last September. Philadelphia-based Pennsylvania Real Estate Investment Trust operates the Fashion District with Macerich, a real estate investment trust headquartered in Santa Monica, Calif.
The Fashion District reopened at 69% capacity on July 3 after it temporarily shut down at the start of the pandemic, according to PREIT’s second-quarter earnings call on Aug. 11. It has continued to add tenants since its initial opening, which most recently included the coworking space Industrious, Kate Spade Outlet, and the shoe store DSW.
“Century 21 is a beloved retailer at Fashion District and was a pioneer in moving into the property and has been one of many successful concepts since it opened,” Heather Crowell, a spokesperson for PREIT, said in an email Thursday. “Fashion District has been well-curated to reflect an array of retail, dining and entertainment offerings for the Philadelphia community. ... Across PREIT’s portfolio, we have successfully replaced department stores with new and engaging uses, with several examples in the Philly market.”
At the Plymouth Meeting Mall in the Philadelphia suburbs, Crowell said, PREIT had replaced a Macy’s with Burlington Coat Factory, Dick’s Sporting Goods, Edge Fitness, Michael’s arts and crafts, and Miller’s Ale House. A Five Below, HomeSense, Michael’s, and Sierra Trading Post had replaced the Macy’s at the Moorestown Mall in New Jersey.
PREIT did not offer further details about the impact of Century 21′s departure on the Fashion District, or what could replace the store, which ranks among the largest retailers on the stretch of Market Street that extends up to City Hall.
The other anchor stores at the Fashion District are Burlington Coat Factory, H&M, AMC Theater, and Round One, a bowling alley and arcade. The clothing store Primark is expected to join the lineup, according to PREIT.
“Century 21′s demise most likely had more to do with struggles in their New York City store, where business has been much more severely impacted than in downtown Philadelphia," said Steve Gartner, executive vice president of global retail services at the commercial real estate services and investment firm CBRE, based in Los Angeles.
The store’s move into Philadelphia was “somewhat pioneering," he said, in that it found a base of customers who flocked to buy steeply discounted high-end merchandise.
“Unfortunately, when a chain disappears, it often has way more to do with their problems across their entire operation than just their Philadelphia-area stores,” he said. "They will be missed in the mix of Market Street retailers because they brought a very unique offering that nobody else really delivered. I’m reasonably confident that, over time, their space will be filled by somebody else. However, it may take some time.”
Century 21, which has its headquarters in New York City, said its customers could continue to shop in-person and online for the time being. It said Northbrook, Ill.-based Hilco Merchant Resources would help manage its sales as the chain began to close its operations.
The company joins a long string of other retailers that have gone out of business during the coronavirus pandemic, some to rid themselves of debt but salvage business, but others, such as Lord & Taylor, to shut down permanently.