Daffy’s Closing All 19 Stores
NEW YORK (CBSNewYork / AP) – Daffy’s Inc., which sells national fashion brands at up to 80 percent off, is going out of business, a victim of a fiercely competitive landscape that has already claimed rivals Syms and Filene’s Basement as casualties.
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The company confirmed Monday the Secaucus, N.J.-based retailer will be winding down business at its 19 stores, including eight in Manhattan, six in New Jersey and one in Philadelphia, over the next several months.
About 1,300 employees will be affected. Daffy’s said that all associates will remain employed and receive pay and benefits for at least 60 days.
“This action was necessary due to the impact on its business of the uncertain economy and weak consumer spending and a lack of viable financial and business alternatives,” said Daffy’s in a statement that was emailed to The Associated Press.
Daffy’s has not determined the date for the final liquidation of the business.
The news follows the moves by discount retailer Syms Corp. and its subsidiary Filene’s Basement, which liquidated all 46 of their stores earlier in the year. Syms acquired Filene’s Basement out of bankruptcy protection in the spring of 2009 for $62.4 million, but struggled to turn the chain around.
Daffy’s, which has been in business for 51 years, faced slowing sales as what’s known as the “off-price” arena became more competitive starting in 2005, according to Marshal Cohen, chief industry analyst with market research firm The NPD Group. That’s when national brands started to expand their outlet business, leaving off-price retailers with fewer opportunities to buy discontinued items or leftovers.
Daffy’s and others are also competing against department stores which offer similar discounts on the same brands.
Meanwhile, Daffy’s has faced stiff competition from TJX Cos Inc., which operates TJ Maxx, Marshalls, and HomeGoods, as well as Ross Stores Inc. Both chains have been expanding quickly and have been able to pull in hot brands that are in the current season because of strong relationships with suppliers. That’s even as regular-price retailers and brands have been cautious in ordering and producing goods.
“In this business, you’re only as good as the brands that you can get your hands on,” Cohen said.
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