Bluefly.com Reports Record Fourth Quarter and Full Year Results; Company Exceeds Expectations for Revenue, Net Income and Earnings-Per-Share.

    Business Editors

    NEW YORK--(BUSINESS WIRE)--March 8, 2000--Bluefly, Inc.
(NASDAQ SmallCap: BFLY), a leading online outlet for designer
fashions and home furnishings (www.bluefly.com), announced today that
its gross and net revenues for the fourth quarter of 1999 from
product sales were $4,202,000 and $3,042,000, respectively,
approximately 1,350% better than the fourth quarter of 1998.
    Gross revenue excludes shipping and handling, returns and
allowances for bad credit. Compared with the third quarter of 1999,
gross revenue increased by 246%, from $1,216,000, while net revenue
grew by 252%, from $863,000. For all of 1999, Bluefly generated gross
revenue of $6,871,000 and net revenue of $4,951,000. Gross margin was
24.0% for the fourth quarter of 1999 and 23.9% for the full year.
    Bluefly's net loss for the fourth quarter was $5,690,000, or $1.20
per share. The loss for the full year was $13,194,000, or $2.82 per
share.
    "We have been able to generate explosive growth throughout 1999
while maintaining strong gross margins and keeping our marketing
investment well within our planned budget," said Ken Seiff, Chief
Executive Officer of Bluefly. "While our performance has been strong
across the board, two of the most important measures that we look at
when we analyze our business are our ability to drive traffic to our
Web site and our ability to convert that traffic into revenue. During
the fourth quarter, our average unique monthly visitors increased to
over 507,000, up 156% from the first quarter of 1999. Moreover, the
amount of gross revenue we generated per unique monthly visitor grew
by 294% during the year, from $.70 in the first quarter to $2.76 in
the fourth quarter. We believe that this dramatic increase in our
ability to convert visitors into customers reflects the wide scale
improvements we have made to our Web site design, technology
infrastructure and merchandising mix throughout the year," added
Seiff.
    The Company completed a number of strategic initiatives in the
past few months, including:

--  Signing exclusive content deals with four major fashion magazines,
    including Marie Claire, Esquire, Seventeen and Metropolitan Home.
--  Establishing new relationships and expanding existing
    relationships with several key Internet portals, including
    MSN.com, theglobe.com, Warner Bros., Alloy and Inktomi.
--  Significantly enhancing the performance of its website. Recent
    technology initiatives completed by Bluefly have improved the
    site's ability to deliver better graphics at higher speeds and
    support a larger number of visitors, both of which improve the
    conversion of visitors into customers.
--  Substantially broadening supplier relationships, closing the year
    with more than 300 brands. The company currently sources more than
    200 of these brands directly from designers.
--  Making key additions to the management team and adding new members
    to the Board of Directors. Board member Robert Stevens joined the
    company full time as Executive Vice President. The company also
    named Mark Goldstein and Ellin Saltzman to the Board of Directors.
    Mr. Goldstein is an Internet executive with Softbank Holdings and
    the former Chief Executive of the Impulse! Buy Network. Ms.
    Saltzman is a former senior executive and former fashion director
    at Bergdorf Goodman, R. H. Macy & Co., Saks Fifth Avenue and The
    Limited.
--  Creating a second revenue stream through the launch of the
    Bluefly/First USA co-branded Platinum Visa credit card.

    Bluefly is a NASDAQ SmallCap public company headquartered in New
York City, in the heart of the fashion district. Distinguishing itself
with discounts of up to 75%, products from over 300 designers and a
90-day money back guarantee, Bluefly.com aims to be the world's first
full service outlet store for designer fashions. 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 many of the most
visited Web Sites and portals including AOL, Excite, Lycos, MSN,
Netcenter, Tripod, Women.com and Yahoo! For more information, visit
www.bluefly.com.

                             Bluefly, Inc.

     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

                    Three Months Ended              Year Ended
                December 31, September 30,  December 31,  December 31,
                    1999          1999          1999          1998(a)

Net sales      $  3,042,000  $    863,000  $  4,951,000  $    215,000
Cost of sales  $  2,312,000       656,000     3,766,000       266,000
 Gross profit
  (loss)            730,000       207,000     1,185,000       (51,000)


Selling,
 marketing and
 fulfillment
 expenses         5,158,000     2,664,000    11,424,000     1,121,000
General and
 administrative
 expenses         1,407,000     1,003,000     3,458,000     1,166,000
Internet start
 up costs                --            --            --       332,000

 Operating loss
  from continuing
  operations     (5,835,000)   (3,460,000)  (13,697,000)   (2,670,000)

Interest and
 other income       145,000       111,000       440,000       142,000

Income tax
 benefit                 --            --            --        50,000

Loss from
 continuing
 operations      (5,690,000)   (3,349,000)  (13,257,000)   (2,478,000)

Income (loss)
 from discontinued
 operations              --            --        63,000    (1,178,000)

Net loss       $ (5,690,000) $ (3,349,000) $(13,194,000) $ (3,656,000)

Basic and
 diluted net
 (loss) income
 per share
 (after preferred
 stock dividends)

 Continuing
  operations          (1.20)         (.71)        (2.83)         (.89)
 Discontinued
  operations             --            --           .01          (.43)
  Net loss per
   share       $      (1.20) $       (.71) $      (2.82) $      (1.32)

Weighted average
 shares
 outstanding      4,918,497     4,901,749     4,802,249     2,770,869


(a) Bluefly.com opened its virtual doors to the public on September 8,
    1998. In June 1998, prior to the launch of Bluefly.com, the
    Company discontinued its Pivot Rules division, which marketed a
    collection of golf sportswear, and devoted all of its energy and
    resources to building Bluefly.com. As a result, the majority of
    financial results for 1998 relate to the discontinued golf
    division, and comparisons of 1999 amounts to 1998 amounts should
    be regarded accordingly.


SELECTED BALANCE SHEET DATA & KEY METRICS

                                              December 31, 1999

Cash                                                $ 7,934,000
Inventories                                         $ 7,020,000
Other Current Assets                                $ 1,080,000
Property & Equipment, net                           $ 1,037,000
Total Current Liabilities                           $ 6,523,000
Shareholders' Equity                                $10,586,000

Average Order Size                                  $     93.48
Average Order Per New Customer (a)                  $     88.03
Average Order per Repeat Customer (a)               $    105.79


(a) Revised from preliminary figures released January 2000 to reflect
    changes in methodology of calculating repeat customers.

                                   Fourth    Third   Second    First
                                   Quarter  Quarter  Quarter  Quarter
                                     1999     1999     1999     1999

Average Monthly Unique Visitors
 (as reported by Media Metrix)     507,677  271,333  369,000  198,333
Registered Users                   336,000  190,000   85,370   48,690

Gross Revenue Per Average Monthly
Unique Visitor                     $  2.76  $  1.49  $  0.93  $  0.70
*T
    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; the Company's limited working capital and need
for additional financing; risks 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; 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 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; online commerce security risks;
governmental regulation and legal uncertainties; management of
potential growth; and unexpected changes in fashion trends.

    --30--ac/ny*

    CONTACT: Bluefly, Inc., New York
             Patrick Barry, 212/944-8000, ext. 239
             [e-mail]
             Brian Stanton, 212-944-8000, ext. 384
             Investor Relations
             [e-mail]

    KEYWORD: NEW YORK
    INDUSTRY KEYWORD: RETAIL E-COMMERCE INTERNET EARNINGS