Tuesday, July 17, 2012

Not a shocker coming on the back of today's retal sales number and recent consumer spending / confidence numbers ! Daffy's closing all 19 stores - 1300 jobs going bye bye in the first big retail closure in awhile....

http://articles.marketwatch.com/2012-07-16/industries/32694592_1_marshalls-locations-homegoods-stores



NEW YORK (MarketWatch) — Daffy’s, which sells discounted designer clothing and other name-brand products, will liquidate its 19 stores over the next several months, amid increased competition from its more well-sourced rivals led by T.J. Maxx parent TJX Cos.
The Secaucus, New Jersey-based private company said on Monday its 1,300 employees will remain employed and receive pay and benefits for at least 60 days. The company said it’s not decided on the final date of the closings. Eight of its locations alone are in Manhattan. It has four other locations in New York; six in New Jersey and one in Philadelphia.
The news from Daffy’s follows liquidations of Filene’s Basement and Syms locations late last year.
Daffy’s cash problems surfaced after the company in June told its vendors that it wasn’t able to pay May invoices, Women’s Wear Daily said.
Daffy’s “deeply regrets that 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,” the company said in an emailed statement, declining to elaborate. See related story on weak June retail sales raises back-to-school stakes.
The pending closures of Daffy’s illustrated the shifting retail landscape both in New York and the country as a whole. The family-run business, founded in 1961 and known for its slogan “Clothing Bargains for Millionaires,” pioneered the concept of selling discounted designer clothing in the city, said Faith Hope Consolo, chairman of the Prudential Douglas Elliman retail leasing and sales division.
She had helped Daffy’s secure some of their leases in the city in the late 1980s and early 1990s.
Daffy’s “made discount shopping chic,” she said in an interview. “It was the visionary and pioneer.”
That began to change after fast-fashion retailers from H&M (SE:HMB) to Inditex SA’s (ES:ITX) Zara expanded into the city and “compromised” its discount chic position, Consolo said. TJX dealt the final blow with its aggressive expansion of its namesake chain, Marshalls, and HomeGoods stores in the city in recent years, according to Consolo. (At least five locations were added in Manhattan in the past two years.)
“T.J. Maxx and Marshalls just ate their lunch,” she said. “They got huge buying power. They have access to so many things. They also don’t depend on one city, one location and one economy.”
TJX (US:TJX) , projected to generate more than $25 billion in sales this year, has about 2,300 T.J. Maxx, Marshalls and HomeGoods stores in the U.S. alone. Along with its smaller rival Ross Stores Inc. (US:ROST), it has consistently outperformed the industry average and taken share not only from Daffy’s, but also from mid-tier retailers from J.C. Penney Co. (US:JCP) to Kohl’s Corp.(US:KSS), analysts have said.

and...

http://online.wsj.com/article/APf5a76ed7fc33483794a26783299ee0a1.html



NEW YORK — 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.
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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