Bluefly raises $5 million in new equity financing
Bluefly Inc.’s Bluefy.com, which sells designer fashion apparel at discount prices, raised $5 million in a private stock transaction with a group of investment funds led by Redwood Grove Capital Management LLC. The proceeds add to Bluefly’s year-end cash position of $7.7 million, CEO Ken Seiff says.
"I believe this investment represents an auspicious start to the year not only because it strengthens our balance sheet and enables us to concentrate on growing the business, but also because it came from new investors who have observed our progress from a distance," Seiff said. "I am excited by the prospect of renewed faith in our business from the outside financial community, and I am pleased to have bolstered our shareholder base."
New York-based Bluefly operates solely online except for a single store in Manhattan, which it has been testing as its first brick-and-mortar presence.
Bluefly issued 1,543,210 shares of common stock at $3.24 per share, which was 90% of the trailing five-day average of Bluefly’s volume-weighted stock price as of Dec. 29, 2003, the date that a preliminary agreement was reached as to the pricing of the deal, Bluefly said. The company also issued the new investors warrants to purchase 385,803 shares of common stock at any time during the next five years at an exercise price equal to $3.96 per share.
The common stock and warrants issued in the deal would equal approximately 2.8% of Bluefly`s equity, assuming all outstanding equity securities, stock options and warrants of the company were converted, Bluefly said.
Bluefly’s largest group of investors is affiliated with Soros Private Equity Partners LLC, with about $55 million invested for a share close to 90% of Bluefly’s outstanding equity.
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