Bluefly.com and Soros-led Investor Group Complete Funding of $10 Million Financing.

NEW YORK--(BUSINESS WIRE)--Sept. 1, 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 the investor group led by affiliates of Soros Private Equity Partners, LLC had completed the second and final round of its $10 million financing of Bluefly.com.

The investor group also includes Pilot Capital Corporation, a firm specializing in private equity investments in technology companies, and an additional investor that joined in the second round of the financing.

"In the month since we closed the first round of this financing, the Soros organization has already proven to be an invaluable financial partner, and we look forward to their continued contributions in the future," said Ken Seiff, chief executive officer of Bluefly.com.

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 and brands that are available for sale in their sizes. The online merchant has established strategic alliances with many of the most visited Web Sites and portals including AOL, Excite, Go Network, Lycos, MSN, Netcenter, Tripod, Women.com and Yahoo!.

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); 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.