Off-price chain Daffy’s is said to be under financial pressure.
This story first appeared in the June 22, 2012 issue of WWD. Subscribe Today.
Credit sources said Thursday the Secaucus, N.J.-based chain that began in 1961 as Daffy Dan’s Bargaintown has informed vendors that it can’t currently pay May invoices.
One of the sources said the retailer is in talks with its bank about its cash flow issues. Buyers supposedly have not yet placed orders for fall, market sources said.
A call to Daffy’s chairman, Marcia Wilson, for comment was not returned by press time.
One vendor said Thursday that Daffy’s is facing the same problem Syms Corp./Filene’s Basement and Loehmann’s had: The rise in online flash-sale sites is making it harder for some off-price chains to compete. Others, such as Ross Stores Inc. and The TJX Cos. Inc., seem to be faring better because of their size and buying power clout.
Loehmann’s Holdings filed for Chapter 11 bankruptcy court protection in November 2010 and emerged from bankruptcy in March 2011. Syms Corp./Filene’s Basement filed its bankruptcy court petition in November 2011 and has since liquidated operations.
Daffy Dan’s founder Irving J. Shulman passed away in March 2011.
Wilson, Shulman’s daughter, was chief executive officer until March 2011 when the firm named Caryn Lerner, the former ceo at Canada’s Holt Renfrew, as Daffy’s new ceo. Before that, Daffy’s had considered selling a stake to private equity.