Bluefly.com Increases Inventory Financing Line of Credit
Rosenthal & Rosenthal Provides Company Larger Credit Line Increases Company`s Access to Cash and Trade Credit
NEW YORK--March 25, 2003--Bluefly, Inc. (NASDAQ SmallCap: BFLY), a leading Internet retailer of designer brands at discounts prices (www.bluefly.com), announced today that it renewed its secured, revolving credit facility with Rosenthal & Rosenthal, Inc., a leading independent financial services and factoring firm, for another year and increased the amount of financing available under this credit facility to approximately $4 million from approximately $2.5 million.
Secured by Bluefly`s inventory and a letter of credit procured by an affiliate of Soros Private Equity Partners, this credit facility entitles Bluefly to certain credit accommodations, including the right to obtain loans, factor-to-factor guarantees, and letters of credit issued in favor of Bluefly`s suppliers. The amount of cash or credit accommodations available to Bluefly at any point in time is dependent, among other things, on the value of Bluefly`s inventory.
In consideration for Soros` agreement to increase the amount of its standby letter of credit to $2 million from $1.5 million and to continue to maintain this standby letter of credit as additional collateral for another year, Bluefly issued to Soros warrants to purchase 25,000 shares of Common Stock at $0.78 per share exercisable any time prior to March 17, 2013.
"We are extremely pleased to have expanded our relationship with Bluefly," said Michael Stanley, Executive Vice President of Rosenthal & Rosenthal, Inc. "Bluefly`s high-end retail format does an outstanding job of filling a need for fashion wholesalers and retailers, who may be troubled by the potential of diluting their brand image when their merchandise appears in traditional off-price stores," Stanley added.
"Rosenthal & Rosenthal has been instrumental in helping us to grow Bluefly`s business over the past two years," said Ken Seiff, Chief Executive Officer of Bluefly, Inc. "That they are willing to extend even more credit to us this year, at a time when the equity markets are tight and many retailers are struggling for financing, is particularly pleasing," Seiff added.
About Bluefly, Inc.
Bluefly, Inc. (NASDAQ SmallCap: BFLY) operates the world`s first full service outlet store for designer fashion, offering products from more than 350 designers at discounts of up to 75% off. With 24/7 access, a 90-day money back guarantee, and technology that displays real-time inventory, Bluefly makes off-price shopping easy and convenient. Bluefly is headquartered at 42 West 39th Street in New York City, in the heart of the Fashion District. For more information, please call 212-944-8000 or visit www.bluefly.com.
This press release may include statements that constitute "forward-looking" statements, usually containing the words "believe", "project", "expect", or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. The risks and uncertainties are detailed from time to time in reports filed by the company with the Securities and Exchange Commission, including Forms 8-A, 8-K, 10-Q, and 10-K. These risks and uncertainties include, but are not limited to, the following: the Company has granted liens on substantially all of its assets; a default by the Company under the Rosenthal Credit Facility would have material adverse effects on the Company and could result in dilution to its common stock shareholders; the company may not generate sufficient cash flow to pay its indebtedness or meet its financial covenants under the Rosenthal credit agreement; the Company`s limited working capital, need for additional capital and potential inability to raise such capital; recent losses and anticipated future losses; risks and uncertainties associated with the Company`s recent launch of a new version of its web site, including new internal procedures that need to be developed to operate the new web site, site instability and download performance issues; the risk that favorable trends in sales, repeat customer sales, gross profit, gross margin and reduced selling, marketing and fulfillment expenses and reductions in operating losses will not continue; risks that the Company will be unable to reduce the levels of losses; potential adverse effects on gross margin resulting from mark downs and allowances; risks of litigation for sale of unauthentic or damaged goods and litigation risks related to sales in foreign countries; the dependence on third parties and certain relationships for certain services, including the Company`s dependence on United States Postal Service and U.P.S. (and the risks of a mail slowdown due to terrorist activity) and the Company`s dependence on its third-party web hosting and fulfillment centers.
CONTACT:
Bluefly, Inc., New York
Investor Contact:
Patrick Barry, 212/944-8000 x239
pat@bluefly.com
or
Press Contact:
Cathy Halgas Nevins, 212/944-8000 x388
cathy.nevins@bluefly.com
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