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Bluefly may have a buyer
A sale of the online retailer could be announced within two weeks.
Apparel retailer Bluefly Inc. says it may have a buyer for the company, and a sale could be announced within two weeks.
Details about the potential sale surfaced in the web-only retailer’s recently filed annual report. Bluefly says it has enough funds to continue operating until the anticipated signing date of an agreement. The sale is expected within the next two weeks, says James Gallagher, Bluefly chief financial officer. He would not say who the buyer might be.
Should the sale not happen, Salus Capital Partners LLC, the lender backing Bluefly’s $10 million line of credit, could foreclose on the e-retailer. Bluefly says that Salus will work with the retailer through mid-June; after that, Bluefly would need additional waivers or accommodations from the lender to access more credit. Bluefly used $5.3 million of that $10 million credit line as of Dec. 31.
Earlier this month Bluefly announced it was working on a potential sale of the company in an effort to keep it operating. Its 2012 loss of $24.9 million is more than twice its 2011 loss of $11.4 million.
Bluefly last year embarked on a new strategy to recapture sales lost to flash-sale e-commerce sites that offer deep discounts for limited periods. Its goals are to lower Bluefly’s customer acquisition costs, increase the lifetime value of its customers and increase its return on invested capital by lowering prices to increase inventory turnover, Bluefly says.
That may be panning out. Bluefly says that while its 2012 sales were less than 2011, it had 17% less average inventory on hand at the end of 2012 than at the end of 2011.
For the year ended Dec. 31, Bluefly, No. 179 in the Internet Retailer Top 500guide, reported:
- Sales decreased 3.0% to $93.4 million from $96.3 million in 2011.
- Average order size was $242.38, a 20.0% decrease from $303.11.
- Sales and fulfillment expenses increased 13.1% to $21.6 million from $19.1 million.
- Marketing expenses decreased 26.6% to $8.0 million from $10.9 million.
- Net loss of $24.9 million, compared with a net loss of $11.4 million in 2011.
For the fourth quarter, Bluefly reported:
- Web sales decreased 14.3% to $25.2 million from $29.4 million in the fourth quarter of 2011.
- Sales and fulfillment expenses were flat at an estimated $5.7 million.
- Marketing expenses decreased 62.2% to an estimated $1.4 million from $3.7 million.
- Net loss of $5.7 million, compared with a loss of $6.1 million in the fourth quarter of 2011.
Bluefly did not provide an average order size for the fourth quarter.