The everything must go signs have been up for more than a week at century 21, the off-price department store where for the cost of a few frustrating hours a shopper might stumble upon a deeply discounted hugo boss suit or pair of saint laurent pumps.
Earlier this month, the company announced it would file for chapter 11 bankruptcy and close all 13 of its stores as well as its ecommerce operations, winding down a family-owned business that was founded in 1961.
Many new yorkers are mourning its passing, although few have expressed surprise at its demise.
I feel like i grew up in the original one downtown and it had the best deals, but then it turned into a traditional department store that didnt have the same sort of chase, meredith paley, 53, said as she waited in line to browse the stores closing sale on the upper west side. still, she said: after loehmanns closed [in 2014] i looked to century 21.
Century 21s flagship at the world trade center has been a destination for tourists and local bargain hunters for decades. it was namechecked in the hbo television series sex and the city by sarah jessica parkers character carrie bradshaw, who called the downtown store the best part of jury duty. it was a mention the company still clung to for its discount bona fides in the footnote of a court filing this year.
For those in new york who felt excluded either by the staff or the prices of traditional department stores, century 21 was akin to valhalla. it was the opposite of the insider-only sample sale, the one hidden three flights up a nondescript building in the garment district.
The hunt, like any, could often end in disappointment. it was a part of the trade: shoppers, including this reporter, never knew if they would leave with discounted adidas socks in their plastic century 21 shopping bag or a lanvin blazer dug out from one of the rows and rows of discount suits. for legions of new york university undergraduates, the short subway ride downtown was almost a part of orientation, a rite of passage not unlike the annual barneys warehouse sale that allowed 20-somethings the ability to play dress-up with labels they would otherwise be unable to afford.
The bankruptcy and liquidation proceedings are only the latest in a tumultuous year for retailers across the us, businesses that have been felled by a sharp drop-off in consumer spending as coronavirus has spread across the country. neiman marcus, j crew, lord & taylor, brooks brothers and jc penney all filed for bankruptcy this year. barneys, the luxury goods department store, closed its doors for good earlier this year after filing for bankruptcy in 2019.
Century 21, which generated $747m in revenues in the last fiscal year, said it was forced to close after its insurers, including maurice greenbergs starr group and allianz, failed to pay out business continuity insurance. the department store sued its insurers in july for $175m after it had fallen into default on a revolving credit facility, owing $56m to jpmorgan chase, bank of america and bank hapoalim. it owed millions of dollars more to suppliers such as calvin klein-owner pvh.
Insurance money had helped save the company before. the century 21 flagship on cortlandt street was significantly damaged in the september 11 attacks in manhattan, forcing its closure. the retailer ultimately chose to rebuild on the same site, reopening months later and remaining a destination as new skyscrapers soared again around it.
While the companys financial records are private, off-price retailers tend to perform well during economic downturns.
Off-price is attractive in a recession and coming out of a recession, so it is surprising to see them fold, john kernan, an analyst with cowen, says.
Discounters thrived during the last financial crisis, even as the fashion industry suffered. customer traffic at tj maxx and marshalls owner tjx rose in 2008 and 2009, and both it and discount rival ross stores reported an uptick in revenues. ecommerce sites such as gilt groupe and rue la la flourished while major department stores worked to expand into the outlet business as they sat on excess inventory.
But the collapse in retail spending in 2020 far exceeded anything apparel retailers had seen in the preceding four decades. confined predominantly to their homes, consumers have not felt the need to splurge on cocktail dresses or workwear. its unclear when demand for that merchandise will return.
In 2008, people still gathered together in large groups and socialised and continued with much of their everyday way of life, says alexandra wilkis wilson, one of the co-founders of gilt. this past spring consumers quickly became used to living their lives based from home...differences in lifestyle have really impacted how consumers have been thinking about spending.
Wilkis wilson had walked the floors of the downtown century 21 in the early days of gilt to research which brands had excess merchandise and to see what was selling well. years before, when she was an analyst at merrill lynch, she would duck out to the store on her lunch break. that was before real estate developer brookfield built a luxury mall opposite the world trade center, when the shopping options downtown were still slim.
It was a new york landmark, she adds. an institution.
Since the 2008-09 crisis, competition within the off-price industry has intensified. purveyors of luxury goods have shifted their businesses away from wholesale distributors as they have built their own ecommerce and retail operations. many opened their own outlet stores, trying to capitalise on the consumer searching for a steal. it made shopping increasingly hit or miss at a department store such as century 21, which had a harder time of securing merchandise from top brands.
The company also faced growing competition from online channels, where shoppers can easily compare prices and snag bargains without having to sift through racks and racks of clothes. second-hand sites such as the realreal, which carry gently used wares from brands such as chanel and herms, have grown into $1bn revenue businesses.
The gindi family, which owns century 21, was still plotting its expansion before coronavirus struck. the company had agreed to open a store across the hudson river in the american dream, the maligned new jersey megamall that after years of remodelling had planned to open its doors to shoppers this march. two other new brick-and-mortar locations were also in the works.
They will no longer come to pass. century 21 was unable to find a buyer for its business, and no investor stepped up to inject new cash. its unclear what will come to replace its cavernous location in the financial district as other apparel retailers retrench, and gyms and eateries shutter.
It was always good to come shop and find great bargains, said rance warlock, a new yorker who was waiting in line to shop at the going-out-of-business sale. im not a label guy, but quality is important.
The city, of course, has found a way of moving on before. the century 21 near lincoln center was previously a barnes & noble, the famed bookseller that was blamed for spurring the decline of the independent bookstore in the 1990s. but in 2010, the company decided it could not keep up with rising rents, and moved to close the neighbourhood landmark.
This space was always important, warlock added. there are so many vacancies in the area. its sad.
Eric platt is the fts us mergers & acquisitions correspondent
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