BLUEFLY CUTS LOSSES
Byline: Peter Braunstein / Evan Clark
NEW YORK — Online off-pricer Bluefly.com reported on Wednesday a narrowing of its fourth-quarter loss from a year ago, attributed to cuts in advertising costs and increased average order size.
The company’s loss for the quarter was $5.4 million, or $1.13 per share, compared with a loss of $5.7 million, or $1.20, a year ago.
Sales for the period ended Dec. 31 jumped 86.9 percent, to $5.8 million from $3.1 million a year ago. Business from repeat customers accounted for 50 percent of revenues in the quarter, up from 35 percent in the 1999 period.
Customers, on the whole, bought more as well, pushing up the average order size to $121, a 30.1 percent increase from a year ago. As a percentage of net revenues, advertising expenditures decreased approximately 38 percent from a year ago.
Total costs of selling, marketing and fulfillment increased 5.4 percent, to $4.3 million for the quarter.
“We see [the results] as a significant event,” Bluefly chief executive officer Ken Seiff told WWD. “We have had to significantly invest in the growth of the business, which has resulted in losses but has also built a substantial customer base. Now, we’ve reached the point where repeat customers are driving down quarterly losses.”
At the end of third quarter, Seiff had hinted at a strategy to reach profitability that would soon be outlined publicly, but at this juncture he felt impeded from disclosing the plan. “As much as I would like to, we can’t make any forward-looking statements because we are in an offering stage right now, until March 26,” said Seiff.
The steadfast backing of Soros Private Equity Partners has enabled Bluefly to defy dot-com death, as well as Nasdaq delisting due to low share price. As reported, Soros last month increased its stake in the dot-com to 72.8 percent, allowing Bluefly to wipe $20 million in long-term debt off its books by converting those obligations to preferred equity. Seiff elaborated on Soros’s enlarged role in the stewardship of Bluefly. “Soros’s actual investment stake will not get determined until the end of offerings in March, at which time the percentage will be gauged by how much the public invests,” he said. “Soros’s increased financial commitment has opened many doors for us, without resulting in any managerial changes.”
For the year, net losses for the e-commerce firm, based here, widened to $21.1 million, or $4.45 a share, from $13.2 million a year ago. Year-ago results include income of $63,000, or 1 cent, from discontinued operations.
Sales for 2000 skyrocketed 242.8 percent, to $17.5 million from $5.1 million in 1999.
Shares of Bluefly closed at $1.13 Wednesday, down 16 cents in Nasdaq trading.