New York—Bluefly.com reported last week that it swing into a fourth quarter loss due to costs related to higher inventory levels and launching its Belle & Clive flash sale site.
For the quarter ended Dec. 21, Bluefly posted a net loss of $6.2 million, or 22 cents a share, compared with a net profit of $300,000, or 1 cent share, a year ago.
Total net sales increased by 3% to $29.4 million. Gross profit margins narrowed to 21.9% from 34.9% a year ago, “primarily attributable to an increase in inventory reserves of $2.4 million and a write off of $1 million related to merchandise credits” Bluefly doesn’t believe will ever be collected from vendors.
“The increase in inventory reserves was primarily the result of a shift in company strategy with a view to accelerating inventory turns,” the report noted.
Pivotal Year: Opened Eyefly, Belle & Clive
Net full year sales rose 9% to $96.3 million as demand continued for off-price designer merchandise though a 6% operating expenses offset the sales gain, the company said. Net loss for the year was $11 million, or 43 cents a share, compared with a net loss of $4 million, or 17 cents a share in 2010.
“Fiscal 2011 was a pivotal period for our company,” added Joseph Park, ceo. “We implemented key strategies to position our company for future growth.
“To this end, we expanded our category reach with the launch of Eyefly.com in June 2011 and just prior to year end introduced Belle & Clive…enabling us to leverage the 20 million unique visitors to Bluefly.com and our more than 350 brand relationships to offer the most important brands with limited time offers at members only pricing.”