If you’ve ever lived in New York City and are over the age of 30, the chances are good you’ve spent time spelunking in Century 21’s hectic, colorful hub of designer bargains. Known for deeply discounted Chanel suits, Steve Madden pumps, Lucky jeans and the like, the department store was a symbol for the city’s aspirational glamour. Carrie Bradshaw once even paid the lower Manhattan flagship store a visit while serving jury duty in a now iconic Sex and the City episode, and the costume designer for recent NYC time warp Uncut Gems outfitted Adam Sandler from their discount bins.
Despite its cult status, especially to an older generation of New Yorkers, Century 21 is closing its doors for good. The department store filed for bankruptcy last Thursday and announced plans to liquidate its 11 stores in New York, New Jersey, Pennsylvania and Florida, putting 1,400 jobs at risk, reports Bloomberg. The company fought for insurance payouts after closing their stores due to the pandemic in mid-March, but was left cash-strapped. The company listed assets and liabilities of at least $500 million. The company follows Neiman Marcus, JC Penney, Lord & Taylor and others into bankruptcy, but is one of the few store chains liquidating completely, alongside Pier 1 Imports.
💎 Data Digs
Century 21’s closure is a blow to New Yorkers, but also to a number of REITs who collected rent from the department store.
|
# |
REIT |
# of Century 21 locations |
|
1 |
Simon Property Group |
5 |
|
2 |
Merlone Geier |
3 |
|
3 |
Pennsylvania Real Estate Investment Trust |
1 |
|
4 |
Ramco-Gershenson Properties Trust |
1 |
|
5 |
Shopping Center Group |
1 |
|
6 |
Smartcentres |
1 |
|
7 |
Stockland |
1 |
|
8 |
Forest City Enterprises |
1 |
|
9 |
Urban Edge |
1 |
|
10 |
General Growth Properties |
1 |
Simon Property Group was the biggest investor in Century 21 in the tristate area, while Merlone Geir was the department store’s main landlord in California. SPG has been involved with many of the recent department store bankruptcies. As they lose their Century 21 rent checks, they’re picking up JC Penney’s entire business. Last week, the mall giant struck an $800 million deal with JC Penney, averting the department store meeting the same fate as Century 21.
⚔️ Big Picture
- Century 21 was left with “no viable alternative” to a full shut-down by its insurance providers owed the store $175 million under their business interruption policy, according to Co-Chief Executive Officer Raymond Gindi, son of the original co-founder Al Gindi. “Had insurers not “turned their backs on us,” he says, the store would have been able to weather the storm.
- Century 21 is taking several of their insurers to court. They’re not alone: Bloomberg says over 1,100 cases tied to business interruption law have sprung up in court during the pandemic, with businesses demanding payouts and insurers arguing that pandemics aren’t a covered interruption. The company has argued that insurers helped them rebuild during 9/11, when tourism and retail were decimated, so why not this time? Unfortunately for them, property insurers have been winning these cases.
- In some ways, the retailer’s iconic reputation — and thus, dependence on tourism — was a vulnerability. Heather Feinmel, director of marketing for Century 21, told Forbes in July that the company’s downtown flagship store especially had been “very challenged” by the absence of the tourists, commuters and office workers who made up much of their foot traffic.
- The department store had a heavy debt load before the pandemic, according to court papers, accumulated over years of struggle with online shopping and changing trends.
- Century 21 tried to keep up with the fashion world, opening a “Next Generation” concept store in 2017 stocked with up-and-coming designers like Jeremy Scott and Telfar. In 2019, the department store hosted Victor Barragán’s 2019 runway show.” But even at these vents, “it felt like a relic,” writes Vogue. “When everyone is buying from their phones, big department store shopping has a tendency to feel like something from the past.”
⚡ Get Ahead
With the country strapped for cash and the holiday season coming up, people will be looking for deals. Ross Dress for Less, Marshalls, Macys are traditional competitors of Century 21, but giants like Amazon, Target and Walmart, who’ve been seeing profits surge as department stores struggle, will likely pick up business. Fast fashion brands like ASOS and Forever 21 also stand to profit. (Despite their own bankruptcy troubles, Forever 21 is having better luck staying true to their name).
In the meantime, don’t miss the liquidation sale of the century.
About the Data:
Thinknum tracks companies using the information they post online, jobs, social and web traffic, product sales, and app ratings, and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
