November 11, 2003, 12:00 AM’s net sales rise 30% in third quarter

Third-quarter net sales at apparel fashion discounter rose 30.2% year-to-year to $8.2 million, while the retailer also expanded its number of new customers by 29,500.

Kurt Peters

Executive Editor

Third-quarter net sales at apparel fashion discounter Bluefly Inc.’s rose 30.2% to $8.2 million, while the retailer expanded its number of new customers by 29,500, up 32% from the number of customers gained a year ago, Bluefly said today. A liquidation of more than $3 million in excess merchandise led to a sharp drop in gross margins, however, contributing to a widening of its Q3 net loss by 12.6%, to $2.5 million from $2.2 million a year ago.

CEO Ken Seiff attributes the increase in Q3 sales primarily to Bluefly’s increase in customers combined with lower prices offered on many goods. He noted that September sales, which outpaced the rest of the quarter with a 50% year-to-year rise, were helped by a favorable comparison to weak sales in September 2002. But he also attributed September’s hike in sales to the recent redesign of and the addition of fall merchandise. Its third quarter ended Sept. 30.

Seiff said he expects a stronger fourth quarter following the liquidation of goods in Q3, which caused Q3 profit margins to drop to 21% from 33% a year ago. “Our inventory is much improved,” he said. “I expect gross margin in the fourth quarter to be at or near last year’s level of 31%.



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