New York-based retailer Century 21 will file for bankruptcy and close all of its stores, the chain announced Thursday.
In a statement obtained by CNN Business, the company’s co-CEO, Raymond Gindi, blamed the closures on the ongoing business insurance for which Century 21 paid, which it added had refused to pay out a $175 million claim the company had made related to the ongoing COVID-19 pandemic.
“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,” Gindi said, according to CNN.
“While retailers across the board have suffered greatly due to COVID-19 … 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,” Gindi continued.
A spokesperson for an industry trade group told CNN that such insurance policies typically only applied to businesses that suffered some kind of physical damage resulting in lost revenue.
Retail businesses and others around the country have suffered decreased revenue amid the pandemic which has forced thousands of businesses to shutter permanently. Millions of Americans remain out of work and have filed for unemployment benefits in recent months.
Sales for retail businesses have plunged nationwide and many in the industry are hoping for relief in a later round of coronavirus relief spending from Congress.
“The hardest hit retailers are still facing urgent liquidity issues and desperately need access to capital to continue serving their customers. Simply adding more money to small business aid will leave these larger employers without help, so we encourage you to use tools like the tax code and tariff relief to inject liquidity more broadly,” officials for the National Retail Foundation (NRF) urged Congress in July.
A new round of coronavirus relief was unveiled in recent days by Senate Republicans, though Senate Democrats blocked the passage of the bill on Thursday.