NEW YORK — Billionaire investor George Soros is at it again.
This story first appeared in the January 30, 2003 issue of WWD. Subscribe Today.
Affiliates of his Soros Private Equity Partners have sunk another $1 million into Internet fashion off-pricer Bluefly Inc., and have obtained warrants from the dot-com pure-play to buy 25,000 shares of its common stock, at $1.12 a share, at any time during the next four years. Bluefly stock closed unchanged at 95 cents in Nasdaq trading Wednesday. During the past 52 weeks, it has ranged from a low of 55 cents a share to a high of $1.95.
“Eventually, we’ll need cash, but we don’t need these [newly provided] funds today,” said Bluefly chairman, president and chief executive officer Ken Seiff. To date, Soros and partners have invested $48 million into Bluefly, in a series of deals that began in July 1999. Soros’ group now holds an 87 percent stake in the company, noted Bluefly chief financial officer Pat Barry.
The fresh $1 million was given in convertible promissory notes that mature on July 30 and bear interest at an annual rate of 8 percent. Depending upon how much, if any, of the notes the Soros group converts into Bluefly equity, its stake in the fashion pure-play could nose north, Seiff said. The exercise of the warrants for 25,000 Bluefly shares would not raise the Soros stake, however.
Seiff declined to say how much cash Bluefly has on hand. The dot-com, based in Manhattan’s fashion district, said Wednesday that it will release its fourth-quarter and full-year results on Feb. 25. Seiff said cashmere, outerwear and European designer labels were fourth-quarter bestsellers.
“We made some progress during the fourth quarter, both on the financial front and with our infrastructure,” Seiff stated, but declined to project results. “Importantly, we rebuilt the Web site….Bluefly.com is now much faster and enables users to perform keyword searches for the first time — they can search by size and color,” he added, alluding to the way many people shop for apparel and a key complaint about Web sites that don’t offer the capability.
And what are Bluefly shoppers searching for this month, besides cold-weather goods? Lots of denim, dresses and footwear, Seiff replied.