According to an article in this morning's Women's Wear Daily, Daffy's is knee-deep in financial woes, and if recent rumors are true, then things are looking kind of bleak. Allegedly, buyers were told to "go on vacation," and recent orders for merchandise have been cancelled. In addition to that, WWD hears that Daffy's told its vendors that they won't be able to pay their outstanding May invoices.
Because of this, Daffy's Chairman and CEO Marcia Wilson might be forced to sell the company. A few years ago, she considered selling part of it to a private equity group, but ended up getting cold feet. Now, she might be rethinking that. According to the article, "Wilson might be forced to go to her fall-back plan, which is to find a buyer for the $150 million, 19-unit chain. Sources said she is already considering her options in that regard."
WWD outlines a few reasons why Daffy's is struggling, which include competition from flash sale sites and an outdated business model that focuses on buying merchandise that's mostly one season old. Meaning, most of the merchandise isn't "wear-now," it's "wear sometime later." You know who else had that strategy? Filene's Basement, and look what happened to them.
The article adds that "hipper fashion chains" like H&M, Forever21, and Topshop are considerably changing the retail game by offering current, on-trend pieces for just as cheap. If worst comes to worst and Daffy's doesn't find a buyer, we may soon have to imagine a world where Times Square virtual peep shows and runway cakes no longer exist.
· Struggling Daffy’s May Be Seeking Buyer [WWD]
· Daffy's in Times Square Will Include a Virtual Peep Show [Racked NY]
· Last Night, Daffy's Used a Cake for a Runway in Greeley Square [Racked NY]