Bluefly.com Reports Over 272% Third Quarter Revenue Growth; Customer Acquisition Cost Improves by 68% and Repeat Customers Generate 51% of Sales.Business Editors NEW YORK--(BUSINESS WIRE)--Nov. 2, 2000 Bluefly Bluefly, Inc.. (NASDAQ: bfly) is an American electronic commerce company based in New York, New York. As one of the leading fashion and lifestyle e-commerce website, Bluefly Inc, has grown rapidly since it’s inception. , Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on SmallCap: BFLY BFLY Bluefly Inc. (stock symbol) ), a leading online outlet for designer fashions and home furnishings furnishings the extra type or quantity of hair on the head, tail, ears or legs, specified for a particular breed. For example, the feathers in setters, the beard in Bearded collies, the eyebrows in Schnauzers. (www.bluefly.com), announced today that its net revenue for the third quarter of 2000 grew over 272% to $3,215,000 from its third quarter 1999 net revenue of $863,000. For the quarter, gross margin was 18.5% and average order size was $100.86 as compared to 24% and $95.83 in the same period a year ago. Bluefly's net loss for the third quarter was $4,781,000. Including preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. dividends, the loss was $4,983,000, or $1.01 per share. "We are extremely pleased with our third quarter results," said Ken Seiff, Chief Executive Officer of Bluefly. "Bluefly had strong growth in revenues, new customers acquired and sales by repeat customers. In terms of operating efficiency, we continued to show progress, achieving our lowest customer acquisition cost ever and generating strong sales per unique visitor," Seiff added. Strong revenue growth was spurred by new customer acquisitions and sales generated by repeat customers. During the third quarter of 2000, Bluefly added 24,497 new customers, up by more than 163% from the 9,280 new customers added in the third quarter of 1999. While adding new customers, Bluefly also saw many of its existing customers return to Bluefly for additional purchases. During the third quarter of 2000, repeat customers accounted for approximately 51% of Bluefly's revenues, up from 35% in the third quarter of 1999. In Bluefly's drive towards profitability, reducing customer acquisition cost continues to be a top priority. In the third quarter of 2000, Bluefly saw its new customer acquisition cost fall by nearly 68% to $57.45 from $178.66 for the third quarter of 1999. In another demonstration of improved operating efficiency, Bluefly saw its gross revenue per unique visitor increase by over 167% to $4.01 in the third quarter of 2000 from $1.50 in the same period a year ago. "Of all the success we had this quarter, I am particularly proud of our improvement in operating efficiency. Lowering our customer acquisition cost by more than $121 over the past year was no small feat. Seeing our gross revenue per unique visitor increase by more than $2.50 over the past year and stay above $4 during a traditionally weak retail quarter was also very gratifying grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. ," Seiff added. During the third quarter of 2000, Bluefly added over 108,000 registered users, up from the 104,985 registered users added in the third quarter of 1999. At the end of September September: see month. 2000, Bluefly's total registered user base was nearly 747,000 and its customer list, which is part of its registered user base, exceeded 148,000. "This past quarter was as much about preparing for the future as it was about anything else," Seiff stated. "To insure Insure can mean:
tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. center. During the move, which took approximately 12 weeks, large portions of our inventory were not available for sale on the Web site. When you consider that the move was not completed until early October October: see month. , we believe our sales for the quarter are even more impressive. More importantly, our new fulfillment center is ready for the holidays and is capable of supporting much higher levels of demand." Seiff added. "Working with Credit Suisse First Boston Credit Suisse First Boston was originally the trading name of the Financière Crédit Suisse-First Boston, a London-based 50-50 investment banking joint venture formed in 1978 between the First Boston Corporation and Credit Suisse. to raise additional capital was another project during the quarter that consumed con·sume v. con·sumed, con·sum·ing, con·sumes v.tr. 1. To take in as food; eat or drink up. See Synonyms at eat. 2. a. a lot of management time and attention. Because until recently it was not clear what financing strategy Bluefly would pursue, management made the decision during the third quarter to reduce significantly its marketing budget, limit severely its purchase of new inventory and try to convert as much existing inventory into cash as possible. When you consider all this, we believe that this makes our results for the quarter even more impressive," Seiff added. "Looking ahead, we believe that the drop in gross margin that we saw during the third quarter, which was largely the result of dropping prices in an effort to convert inventory into cash needed for holiday buys, should not continue. To the contrary, we expect the gross margin to return at least to historical levels and, perhaps, to display further improvement. In short, we believe that Bluefly is well positioned to take advantage of the holiday selling season," Seiff added. Bluefly is a NASDAQ SmallCap public company headquartered in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , in the heart of the fashion district. Distinguishing itself with discounts of up to 75%, products from more than 350 designers and a 90-day money back guarantee, Bluefly.com aims to be the world's first full service outlet store An outlet store or factory outlet is a retail store in which manufacturers sell their stock directly to the public through their own branded stores. The stores can be can be brick and mortar or online. for designer fashions. Its innovative MyCatalog feature is designed to eliminate the "hit-or-miss hit-or-miss adj. Marked by a lack of care, accuracy, or organization; random. hit or miss adv. " aspect of off-price off-price adj. 1. Of, relating to, or being a retail store that sells merchandise at prices lower than usual. 2. For sale at prices lower than usual: off-price assortments of women's clothing. 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 many of the most visited Web Sites and portals including AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. , Excite, MSN (1) (MicroSoft Network) A family of Internet-based services from Microsoft, which includes a search engine, e-mail (Hotmail), instant messaging (Windows Live Messaging) and a general-purpose portal with news, information and shopping (MSN Directory). , Netcenter An earlier name for Netscape's home page and Web portal. There were so many visitors to Netscape's home page that it was turned into a full-service Web portal, providing Web search, news, white and yellow pages, classified ads, free e-mail and a variety of features. The www.netcenter. , Women.com and Yahoo!. For more information, visit www.bluefly.com.
BLUEFLY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
Three Months Three Months
Ended Ended
September 30, September 30,
2000 1999
Net sales $3,215,000 $863,000
Cost of sales 2,621,000 656,000
--------- -------
Gross profit 594,000 207,000
Selling, marketing and fulfillment expenses 3,889,000 2,664,000
General and administrative expenses 1,307,000 1,003,000
--------- ---------
Total (5,196,000) (3,667,000)
Operating loss (4,602,000) (3,460,000)
Interest (expense) income, net (179,000) 111,000
--------- -------
Net Loss (4,781,000) (3,349,000)
Preferred stock dividends (202,000) (140,000)
----------- ---------
Net loss available to common shareholders (4,983,000) $(3,489,000)
=========== ============
Basic and diluted (loss) income per common
share $ (1.01) $ (0.71)
======== ========
Weighted average shares outstanding 4,924,906 4,901,749
========= =========
SELECTED BALANCE SHEET DATA & KEY METRICS
September 30, December 31,
2000 1999
Cash $906,000 $7,934,000
Inventories, net 7,934,000 7,020,000
Other current assets 1,785,000 1,080,000
Property and equipment, net 1,294,000 1,037,000
Total current liabilities 5,048,000 6,523,000
Notes Payable, net 11,679,000 --
Redeemable preferred stock
and shareholders' (deficit) equity (4,658,000) 10,586,000
September 30, September 30,
2000 1999
Average Monthly Unique Visitors * 376,666 271,000
Gross Revenue Per Average Monthly
Unique Visitor * $4.01 $1.50
Average Order Size $100.86 $95.83
Average Order Size per New Customer $88.86 $84.56
Average Order Size per Repeat Customer $115.45 $126.52
Registered Users 746,726 190,355
Registered Users Added During Quarter 108,457 104,985
Total Customers 148,071 23,725
Customers Added During Quarter 24,497 9,280
Revenue from Repeat Customers as
% of Total Revenue 51% 35%
Customer Acquisition Cost ** $57.45 $178.66
* Based on Media Metrix data.
** Customer Acquisition Cost is calculated by dividing total
advertising expenditures (excluding staff related costs) by total new
customers added. New customer number is based on unique email
addresses.
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 Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 Company's limited working capital, need for additional capital and potential inability to raise such capital; the competitive nature of the business and the potential for competitors with greater resources to enter such business; risks of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. for sale of unauthentic or damaged goods DAMAGED GOODS. In the language of the customs, are goods subject to duties, which have received some injury either in the voyage home, or while bonded in warehouses. See Abatement, merc. law. and litigation risks related to sales in foreign countries; consumer acceptance of the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the as a medium for purchasing apparel; recent losses and anticipated future losses; potential adverse effects on gross margin resulting from mark downs and allowances; the capital intensive nature of such business (taking into account the need for advertising to promote such business); the dependence on third parties and certain relationships for certain services, including uncertainty arising from a lack of operating history with the company's new fulfillment center; the successful hiring and retaining of personnel; the dependence on continued growth of online commerce; rapid technological change; online commerce security risks; the startup nature of the Internet business; governmental regulation and legal uncertainties; management of potential growth; and unexpected changes in fashion trends. |
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