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Daffy’s Inc.

Daffys Inc.

1 Daffys Way
Secaucus, New Jersey 07094
U.S.A.
(201) 902-0800
Fax: (201) 902-9016
Web site: http://www.daffys.com

Private Company
Incorporated: 1961 as Daffy Dans Bargaintown
Employees: 600
Sales: $114 million (1997 est.)
SICs: 5651 Family Clothing Stores

Daffys Inc. is a discount retailer, based in the northeastern United States, of mens, womens, and childrens apparel and accessories. Noted for cheap but often stylish clothing, it also was well known in the 1990s for its cheeky billboards and other outdoor print ads advising readers that they would be foolish to pay full price elsewhere.

Growing Retail Chain: 1961-94

Daffys had its start in 1961, when Irving Shulman opened a small off-price clothing store named Daffy Dans Bargaintown on a back street in Elizabeth, New Jersey. Shulman publicized his wares with zany promotional stunts that made him a local celebrity. He sold silver dollars for 88 cents, placed mannequins on the stores roof to attract the attention of passersby (who came into the store to warn that a woman was about to jump), and parked three leased Rolls-Royce limousines outside the store to illustrate his claim of clothing bargains for millionaires. He also placed advertisements declaring, 99 out of 100 psychiatrists say Daffy Dan is O.K.; its just his prices that are crazy.

There was, of course, method to this madness. Daffys was still, in 1990, paying as much as 60 percent below regular wholesale price for its merchandise by purchasing goods that manufacturers had been unable to sell to department and specialty stores. The manufacturer was happy to sell the overstock for what he could get since a new shopping season was, or soon would be, under way. Daffys policy was to take delivery of purchased goods immediately and stock it in its stores within days. Most of its goods were domestic, but company buyers sometimes flew to Italy, France, or Spain to purchase clothing from suppliers excess output. In a 1997 New York service article, Corky Pollan wrote that Daffys had cornered the market [for childrens clothing] on the coveted European names that usually surface only in the kids boutiques dotting upper Madison Avenue.

Neither of Shulmans two sons was interested in the business, but his daughter Marcia worked there on Saturdays and during the summer and went on buying trips with her father. She and her husband, Vance Wilson, joined the company in 1970. By the spring of 1987 Daffy Dansrenamed Daffys that yearhad grown to a chain of five stores, 450 employees, and annual revenues of $35 million. Marcia Wilson, the prospective successor to her father, was then vice-president of operations and her husband was vice-president of real estate and development.

By this time Daffys had gone from selling what Shulman called shlock to off-price but high-fashion merchandise. This was made possible because of a growing acceptance by suppliers of the role of the off-price apparel merchant, allowing such retailers access to better quality clothing. With the department stores going in for price cutting, Vance Wilson told a reporter in 1990, suppliers are seeing off-price retailers in a new light, maybe even as a necessity.

Competition from price-cutting department storesand also from manufacturers themselves, who began opening their own outlet storesdid not seem to faze this retailer. By 1989 the number of Daffys outlets had grown to nine, including its first in Manhattan, at Fifth Avenue and 18th Street, which became its flagship, with 34,000 square feet of space on three levels. This section of lower Fifth Avenue had been part of the citys main shopping district a century earlier and now was returning to vogue. The newer Daffys stores were given more tasteful interiors, clearly with the intention of attracting a more upscale clientele.

Daffys made an even bigger splash in 1990, when it opened a 15,000-square-foot store at Madison Avenue and East 44th Street, in the heart of Manhattans shopping district for full-price conservative mens clothing and just across the street from Brooks Brothers flagship store. But Shulman told a reporter, We are not looking to compete directly with [traditional retailers], since we are off-price merchants. We would have gone there even if they werent there because of the office buildings and affluent consumers right there or nearby. Shulman conceded that Daffys offered mostly self-service rather than customer service but added,Our goods are so cheap that a man who comes in for a white shirt will settle for a blue one.

Womens apparel, however, had the dominant role in Daffys chain of outlets; even at the Madison Avenue store, womens accessories shared the main floor with menswear. A visit to the womens departmentone flight down by escalatorturned up racks of Oscar de la Renta cashmere dresses for $99.99. Items such as a Randy Kemper silk jacket for $119.99 and Viewpoints $29.99 swimsuits were further discounted by one-third at the cash register. Some goods had labels cut out at the option of the vendor. Vance Wilson said about 70 percent of the stores sales would be in womens apparel. By 1991 business was so good on Madison Avenue that he said the store needed more space.

Daffys opened a store in the heart of Philadelphia, on Chestnut Street, in 1992, and a third Manhattan outlet in the World Trade Center in 1993, shortly after taking over the lease held by bankrupt Alexanders Inc. for $5.5 million. The following year Daffys launched its fourth Manhattan store in the enclosed Herald Square Mall, at Broadway and West 34th Street. This outlet was described by Pollan as the most stroller-friendly of the chain in Manhattan, bright, spacious, and super-organized.

New York shopping columnists were finding much to admire in Daffys selection and prices during the middle to late 1990s. Lynn Yaeger spotted a navy blue wool Yves St. Laurent dress at the Fifth Avenue store for $69.99 and a silver-and-white-striped Cynthia Rowley T-shirt dress (with a teensy hole near the shoulder) for only $24.99. Besides impossibly chic clothing for your youngest dependents in the infant and toddler departments, Pollan found well-stocked girls and boys departments, with most articles no more than $30. Dany Levy discovered a nice selection of lingerie, sports bras, leggings, and various Lycra-enhanced gear.

In-Your-Face Advertising: 1991-96

By 1995 Daffys was attracting attention not so much for its price-friendly merchandise but for the in-your-face advertising campaigns disseminated by De Vito/Verdi (originally Follis DeVito Verdi), the irreverent agency that won the retailers account in 1991. Daffys had abandoned price-promotional advertising, even during the key Thanksgiving season, because although it resulted in a flurry of sales at some particular time, it did not lead to consistently strong sales every day of the week. Moreover, price-only promotions held down a retailers profit margin and could cheapen its image. According to Ellis Verdi, his agency worked to help the retailer build top-of-mind awareness to the point where their business thrived on no advertised discount or saleonly an increasing perception that this is a great place to shop every day.

Verdi went on to add that in taking the inherently loud word Sale out of the communication, it must be replaced with something just as attention-getting and even more memorable.... Our kind of advertising effectively tells people that they are out of their mind to shop elsewhere. Accordingly, Daffys sunk money into outdoor billboards and posters putting down the full-price competition. One of these showed identical shirts side by side, but one, with a $20 price tag, was captioned Shirt, while the other, with a $68 tag, was captioned Bull-shirt. The copy for another read, The suggested retail price of this shirt is $125. The arms of the depicted shirt formed an obscene gesture, while the next line of copy read, We have a suggestion for whoever suggested it. An all-print ad read, We believe people should be price conscious. They should remain conscious after they see the price.

Daffys was reluctant to buy expensive television time, especially since its urban locations meant that it could reach a large number of people through outdoor advertising. A back-of-the-bus ad read, Hey you, in the taxi. Nice shirt. You could have gotten it for less at Daffys. But youre used to being taken for a ride. Another outdoor ad began, When a clothing store has a sale on selected merchandise, why is it always merchandise you never select? Daffys billboards in front of many of New York Citys most expensive stores during the Christmas season warned pedestrians to watch your wallet in this neighborhoodor to shop at Daffys. Back-of-the-bus ads in Philadelphia proved so effective that Daffys dropped its television spots in this market.

Company Perspectives:

As other retailers seek ways to connect with their audience, Daffys is recognized for its smart, highly creative and often head turning messages designed to keep it top-of-mind among consumers. Through advertising, both print and broadcast, window displays, in-store merchandising and special events, Daffys appeals not only to the cost conscious consumers sense of style and value but their sense of humor.

The copy for one of De Vito/Verdis earliest ads for Daffys read, If youre paying over $100 for a dress shirt, may we suggest a jacket to go with it? To the left of the copy was a photo of a straightjacket. Citing the ad for indifference and contempt toward people with psychiatric symptoms, the Alliance for the Mentally III of New York State, joined by the Friends and Advocates of the Mentally III, petitioned New York Citys Commission on Human Rights to treat it as a bias case. The commission referred the complaint to the American Association of Advertising Agencies, which concluded that De Vito/Verdi did not knowingly offend anyone and that words like crazy and nuts are stigmatizing but so prevalent in advertising that they would be difficult to remove.

Daffys in 1996-97

By the fall of 1996 Daffys had closed its store in the World Trade Center but had opened one on elegant East 57th Street. It was maintaining corporate headquarters in two buildings totaling 102,000 square feet in Secaucus, New Jersey, when, in 1996, the company purchased a 215,000-square-foot warehouse on 20 acres off the New Jersey Turnpike in neighboring North Bergen for about $9 million. It spent $6 million more on refurbishing the 42-year-old facility, which had been empty for nearly a decade, and before the end of 1997 reopened it as corporate headquarters, distribution center, and retail store. Daffys had 12 other stores at the time: the four in Manhattan and the one in Philadelphia; New Jersey outlets in East Hanover, Elizabeth, Paramus, Secaucus, and Wayne; a store in Manhasset, Long Island; and one in Potomac Mills Mall, Virginia. Wilson said the company planned to double the size of the chain during the next five years.

Further Reading

Barmash, Isadora, Daffys Now on Madison Ave.s Elite Retail Row, New York Times, May 28, 1990, p. 30.

Furman, Phyllis, Moderately Priced Retailers Fight Downturn, Savvy National Chains, Grains New York Business, January 7, 1991, p. 19.

Kanner, Bernice, The Taste Police, New York, October 26, 1992, pp.40-41.

Levy, Dany, Marked-Down Town, New York, September 9, 1996, pp. 110-11.

Lockwood, Lisa, Scoop, Womens Wear Daily, June 20, 1990, p. 12.

Pollan, Corky, Cheap and Cheaper, New York, April 28, 1997, pp. 76-77.

Succeeding in Family Businesses, Nations Business, May 1987 p. 26.

Verdi, Ellis, The Great Retailer Advertising Wars, Chain Store Age, September 1995, pp. 30-31.

________, Mingling the Price Message with a Quality Image, Discount Store News, May 15, 1995, p. 71.

A Warehouse Stays in Fashion, New York Times, September 28, 1997, Sec. 9, p. 1.

Yaeger, Lynn, Hail to the Cheap, Village Voice, May 16, 1995, pp. 37-38.

Robert Halasz

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