Internet Retailer Bluefly.com Announces 1998 and Early 1999 Results; Strong First Quarter Results Should Outpace Better Than Expected Fourth Quarter Results
NEW YORK--(BUSINESS WIRE)--March 31, 1999--Bluefly, Inc. (Nasdaq SmallCap: BFLY), a leading Internet retailer of designer fashions at outlet store prices (www.bluefly.com), announced today that its fourth quarter 1998 gross sales before returns and allowances were $324,000 and that it expects its first quarter 1999 gross sales number will be at least 30% higher. The Company also announced that both the traffic to the Web site and the number of registered users have increased.
In the four months of operations since Bluefly.com opened its virtual doors on September 8, 1998, the Company has seen its monthly order volume increase by over 2,700% to a total of 2,733 orders shipped in December 1998 from a total of 96 orders in September 1998. During this same period, monthly traffic to the Web site grew by 2,200% to approximately 664,000 unique visitors from approximately 28,000, and the total number of registered users grew by 1,556% to 26,048 at the end of December from 1,573 at the end of September.
In many respects, the Company's growth has continued in the first quarter of 1999. As of March 30, 1999 the total number of registered users was approximately 48,000. Although the first quarter is traditionally a significantly weaker retail shopping period, traffic to the Web site held nearly constant in the month of January at approximately 624,000 unique users and then reached higher levels in February when approximately 702,000 unique users visited the Web site. The Company also reported that visitors are spending more time in the
virtual store and viewing more pages during an average session. During the first three weeks of March, the average visitor stayed at the online store for 14 minutes and viewed 14 pages of content, up from 11 minutes and 12 pages during the month of February.
"We are extremely pleased with our 1998 financial results and are encouraged by our continued momentum into the first quarter of 1999," said Ken Seiff, Chief Executive Officer.
"Recently, we have expanded the breadth and depth of our management team. Our expanded team of merchants has significantly increased our product offerings to include over 3,400 styles from more than 90 top, name brand designers and implemented a new product strategy which appears to have positively impacted our order volume," Seiff added.
Net sales were $243,000 in 1998 after accounting for $81,000 of reserves for returns, allowances and bad debts. The Company reported a negative gross profit for the year of $54,000. Included in the cost of sales was $86,000 of inventory reserves, substantially all of which related to the start-up of Bluefly.com. The Company reported that its Gross Profit, excluding the inventory reserves relating to the start up of Bluefly, was $26,000 or 10.7% of net sales.
"At Bluefly, we are committed to building our traffic and market share as quickly as possible," Seiff stated. "The Company has entered into strategic marketing relationships which provide it with prominent positioning on seven of the top twelve most visited Web sites and is seeking to establish more such relationships. In addition, we have recently launched a national print advertising campaign which is expected to roll out more fully during the second quarter. The campaign is intended to establish Bluefly as a lifestyle brand and will run in at least 17 different publications, including Forbes, GQ, Vogue and Yahoo! Internet Life," Seiff added.
The Company also announced today that it is in the process of making what it believes will be significant improvements to its Web site. "Bluefly.com has won a number of awards and has been praised by industry experts for its stylish look and ease of navigation," said Seiff. "At Bluefly, however, we are committed to continually improving our customer's experience.
Therefore we are in the process of redesigning our Web site to make it even faster and easier to use," Seiff added. In addition, the Company noted that its site redesign would include the addition of expanded content to help its customers make more informed purchase decisions.
In the last four months, the Company raised a total of $11,018,000 through the exercise of warrants and underwriter's unit purchase options issued in connection with the Company's May, 1997 initial public offering. As of March 26, 1999, 99.3% of the total number of issued warrants have been exercised. "In many respects, we regarded Bluefly.com's first two quarters of operations as an opportunity to test different products and learn about our customer's interests," Seiff noted. "Armed with seven months of data and 11 million dollars of new capital, we intend to move forward aggressively and are looking forward to making significant progress in time for the Mother's Day and Father's Day shopping season," Seiff stated.
Bluefly, Inc. is a NASDAQ SmallCap public company. Headquartered in New York City, in the heart of the fashion district, Bluefly.com aims to be the most enjoyable way to shop for designer and name brand apparel and accessories at up 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 which are available for sale and match their interests. In its effort to become the preeminent Internet retailer of
excess and end-of-season apparel, fashion accessories and home products, Bluefly has established strategic relationships with AOL, Yahoo, Lycos, Excite, Go Network, Netcenter and Tripod. In addition, the Company has established a co-branded site with the leading broadband portal, @Home Network. By offering a meaningful alternative for consumers looking for service and convenience in an outlet store environment, the Company is seeking to stake its claim to the $26 billion total U.S. market for end-of-season and excess apparel and fashion accessories.
Bluefly, Inc.
Summary Financial Highlights
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Year ended
December 31,
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1998 1997
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Loss from Continuing Operations $ (2,478,000) $ (469,000)
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(Loss) income from Discontinued Operations (1,178,000) 88,000
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Net loss (3,656,000) (381,000)
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Basic and diluted loss per share $(1.32) $(.18)
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Avg. number shares outstanding 2,770,869 2,149,315
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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; consumer acceptance of the Internet as a medium for purchasing
apparel; 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); the risk of higher than expected return rates and bad debt expenses; the Company's limited working capital and need for additional financing; risk of
litigation for sale of unauthentic or damaged goods; the successful hiring and retaining of personnel; the dependence on third parties and certain relationships for certain services; 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.
CONTACT: Bluefly Inc., New York
Jonathan Morris, 212/944-8000 ext. 223 |
