Daffy’s rumored to be in financial trouble

by Harry Sheff

SECAUCUS, N.J.—Regional off-price chain Daffy’s is reportedly in financial trouble: rumors have circulated in the market that the retailer’s new Times Square door is costing too much, and that the chain’s buyers have been told to take their vacations now.

Former Holt Renfrew CEO Caryn Lerner was hired by Daffy’s in February last year, but left the company this March. Marcia Wilson, who held the role from 1996 until Lerner joined, resumed her position at the head of the retailer. Wilson is the daughter of the chain’s late founder, Irving Shulman.

Daffy’s opened its 19th store in November, in Manhattan’s Times Square.

“The general marketplace that these discount stores all cater to is the same,” commented Andy Jassin of Jassin Consulting Group. “Century 21 has stolen a bit of the thunder from what Daffy’s had been. I think Daffy’s is going through the same thing that Syms had gone through.”

The off-price chain Syms, which acquired Filene’s Basement out of bankruptcy in 2009, filed chapter 11 last November. At the time, CEO Marcy Syms blamed increased competition from department stores and fewer buying opportunities due to tighter inventory controls.

Jassin added, “There’s no apparent strategy, looking at the inventory at Daffy’s. Overall, assortments have not been up to speed considering the amount of inventory that’s available in the marketplace—either through special deal or negotiation. Although I wouldn’t say that it’s men’s assortments that have been bad. The secondary problem is that they’re now competing with department stores on sale all the time. Lord & Taylor, Macy’s and Bloomingdale’s are all in the discounting business as well. It’s difficult to compete if you don’t have first-class quality merchandise in the stores.”

Secaucus, NJ-based Daffy’s was founded in 1961 and continues to be family owned. The chain’s 19 stores are in New York, New Jersey and Pennsylvania.