Ellen, BFLY news
(COMTEX) B: Soros Led Team to Invest $10 Million in Online Retailer B
B: Soros Led Team to Invest $10 Million in Online Retailer Bluefly.com
NEW YORK, Jul 28, 1999 (BUSINESS WIRE via COMTEX) -- 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 earndividends 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.
Copyright (C) 1999 Business Wire. All rights reserved.
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CONTACT: Media Relations:
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or
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INDUSTRY CODE: RETAIL
INTERACTIVE/MULTIMEDIA/INTERNET
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