Janet Babin, Economic Development Reporter, WNYC News
Janet Babin is a reporter at WNYC covering economic development.
The 30-percent off signs are already in place at area Daffy's stores. The local off-price retailer announced last month that it would wind down operations after being in business for 51 years.
Daffy's is the latest in a string of smaller off-price retailers to close since 2009. Filene's Basement, bought at auction a few years ago by Syms Corp, filed for bankruptcy in last November.
"It's the end of an era," said Howard Davidowitz, chairman of Davidowtiz and Associates, a national retail consulting and investment banking firm headquartered in New York City.
This latest closure comes at a time when the off-price branded industry is going gangbusters, turning in strong earnings reports. Ross Stores reported second quarter net income had jumped by 23 percent. Similarly, TJ Maxx and HomeGoods stores said second quarter net income increased 21 percent.
The New York and New Jersey region used to be a hotbed of small to midsize discount stores, like Syms, that did a brisk business. But smaller discounters, like Daffy's, lack the purchasing power of the bigger chains, according to Davidowitz. "Now the smaller discounters are almost all gone, it's an era of the giants," he added.
Traditional department stores have had to aggressively discount brand name merchandise since the 2008 recession. Combine that with the emergence of flash online clothing sales, and it became too difficult to attract and keep customers, Davidowitz said.
Daffy's also came under increased pressure from so-called fast-fashion stores like Zara's and H&M. Those companies specialize in moving copies of runway looks to stores in record time.
"Fast fashion definitely killed Daffy's," said consumer consultant Burt Flickinger III, managing director of the Strategic Resource Group.
"With less than two dozens stores, trying to get the lowest cost price on goods to compete, just wasn’t in the cards for the company anymore," he added.
In another era, with a better economy, Flickinger said the firm could have gone into bankruptcy, reorganized and reemerged.
"In these times of tight credit, the banks, lenders and creditors can be absolute vultures that kill companies that shouldn't be killed," added Flickinger.
As for those Daffy's discount signs blanketing all the merchandise, Flickinger said cost-conscious shoppers might be better off waiting a few weeks.
"The deep desperation discounting doesn't really start till week three or four, so the smart shoppers that want to save more money will wait at least till after Labor Day," he shared.