Bluefly Q3 Loss Widens on Lower Margin Strategy

In eCommerce, What's New, Industry News by Accessories Staff

New York—Hit by lower gross margins due to its new strategy to increase turn by offering merchandise at lower margin, Bluefly Inc. reported last week that its third quarter loss widened.

For the quarter ended Sept. 30, the designer brand website posted a new loss of

of $6.3 million, or 22 cents a share, compared to net loss of $2.5 million, or 10 cents a share a year ago.

Total net revenue rose 3% to $21.7 million from $21.2 million last year primarily as a result of a reduction in return rates, which were partially offset by a decrease in average order size, and a decrease in shipping and handling revenue related to increased promotional activity.

Gross profit margin decreased to 13.6% from 29.1% last year. “While our gross profit margin decreased during the quarter, our inventory turns have improved by more than 80%,” noted Joseph Park, ceo.

“Furthermore, healthy increases in free traffic, the continued growth in our overall member file, and the cross over between Bluefly and Belle & Clive member files position us well to leverage these drivers, which we believe will enable us to improve operating performance going forward,” Park added.

Earlier this month, the company secured a new $10 million senior working capital credit facility with Salus Capital Partners LLC, which replaces replaces its $7.5 million credit facility with Wells Fargo Retail Finance, LLC.

“We believe that Salus is a great complement to the company’s new strategy and we look forward to a mutually beneficial working relationship for many years to come. Salus is well-positioned to assist us in our future plans.” said Park.

 

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