SOROS LED TEAM TO INVEST $10 MILLION IN ONLINE RETAILER
7/28/99 8:02
Bluefly.com
Business Editors
NEW YORK--(BUSINESS WIRE)--July 28, 1999--Bluefly, Inc. (NASDAQ
SmallCap: BFLY), a leading Internet retailer of designer fashions and
home furnishings at outlet store prices (www.bluefly.com), announced
today that an investor group led by affiliates of Soros Private Equity
Partners LLC has agreed to invest $10 million in Bluefly.com, in a
transaction that will provide capital to accelerate the company's
marketing and advertising efforts and aggressively build inventory in
time for the Christmas shopping season. The investor group also
includes Pilot Capital Corporation, a firm specializing in private
equity investments in technology companies. Pilot was founded in 1987
by Robert McCabe, a former partner at Lehman Brothers.
"Over the past few months, we have explored strategic investment
opportunities with a number of potential partners, including portals,
other e-commerce retailers and brick-and-mortar apparel retailers,"
said Ken Seiff, Chief Executive Officer of Bluefly.com. "Although we
saw many interesting opportunities, we feel that the Soros group best
understood our business, and we are delighted to welcome them into our
company as significant investors. At the same time, we are open to
exploring new opportunities with other strategic investors, and we
expect the Soros group to play an active role in that process," added
Seiff.
"We are excited to be working closely with this management team
as they execute on their ambitious business plan," stated Neal
Moszkowski, a partner at Soros Private Equity Partners. "We believe
Bluefly has an unusual market opportunity to build a large scale
e-commerce business that delivers exceptional service and value to its
customers and suppliers," added Mr. Moszkowski. In connection with the
transaction, Mr. Moszkowski will be joining Bluefly's Board of
Directors.
Under the terms of the financing, the Soros led investor group
will purchase preferred stock from the company, which is convertible
into common stock at the rate of $10.50 per share. The company can
force the conversion of the preferred stock at any time if the average
closing price of its common stock is $31.50 or higher for thirty
consecutive trading days. The investment will give the Soros led group
a 19.5% voting and equity interest in Bluefly, making it the company's
largest group of shareholders. The preferred stock will earn dividends
at the rate of 8% per year, payable in cash or stock, at the company's
option, upon conversion.
Bluefly is a NASDAQ SmallCap public company. Headquartered in New
York City, in the heart of the fashion district, Bluefly aims to be
the most enjoyable way to shop for designer and name brand apparel and
home accessories at savings of 25 to 75 percent off of retail prices.
Its innovative MyCatalog feature is designed to eliminate the
"hit-or-miss" aspect of off-price shopping by allowing shoppers to see
only those products that are available for sale and match their
interests. The online merchant has established strategic alliances
with seven of the twelve most visited Web Sites and portals including
AOL, Excite, Go Network, Lycos, MSN, Netcenter, Tripod and Yahoo!.
According to Media Metrix research, Bluefly is the most visited outlet
store for apparel and home accessories on the Internet.
Soros Private Equity Partners LLC ("SPEP") is an affiliate of
Soros Fund Management LLC. SPEP is responsible for making direct
private equity investments on behalf of Quantum Industrial Partners
LDC, the principal operating subsidiary of Quantum Industrial Partners
Ltd., a $2.6 billion investment fund, and certain other affiliates of
the Quantum Group of Funds. The Quantum Group of Funds is not
generally available to U.S. investors.
This press release may include statements that constitute
"forward-looking" statements, usually containing the words "believe",
"project", "expect", or similar expressions. These statements are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements inherently
involve risks and uncertainties that could cause actual results to
differ materially from the forward-looking statements. The risks and
uncertainties are detailed from time to time in reports filed by the
company with the Securities and Exchange Commission, including Forms
8-A, 8-K, 10-QSB, and 10-KSB. These risks and uncertainties include,
but are not limited to, the following: the competitive nature of the
business and the potential for competitors with greater resources to
enter such business; risk of litigation for sale of unauthentic or
damaged goods and litigation risks related to sales in foreign
countries; consumer acceptance of the Internet as a medium for
purchasing apparel; the Company's limited working capital and need for
additional financing; recent losses and anticipated future losses; the
startup nature of the Internet business; the capital intensive nature
of such business (taking into account the need for advertising to
promote such business); risk of litigation for sale of unauthentic or
damaged goods; the dependence on third parties and certain
relationships for certain services; the successful hiring and
retaining of personnel; the dependence on continued growth of online
commerce; rapid technological change; year 2000 issues; online
commerce security risks; governmental regulation and legal
uncertainties; management of potential growth; and unexpected changes
in fashion trends.
--30--et/ny*
CONTACT: Media Relations:
Margaret McCann, 212/944-8000, Ext. 229
or
Investor Relations:
Jon Freedman, 212/944-8000, Ext. 247 |
