Sales increase 9% at Bluefly in 2011

07 Apr '12

6 min read

• Subscribers to the Company's websites, excluding eyefly.com, increased approximately 254% to 1,015,000 subscribers, from 287,000 subscribers in 2010.
• Cash and cash equivalents decreased to $4.4 million at December 31, 2011, compared to $10.4 million at December 31, 2010.
• Inventory increased to $32.1 million at December 31, 2011, compared to $25.1 million at December 31, 2010.
• Separately, the company expects to incur approximately $1.2 million in non-recurring compensation expenses, including $0.6 million related to non-cash equity compensation, in the first quarter of fiscal 2012 related to the resignation of the Company's prior Chief Executive Officer, which was announced on February 2, 2012.

Results for the fourth quarter of 2011 included the following highlights:

• Net sales increased by approximately 3% to $29.4 million, from $28.6 million in the fourth quarter of 2010, as a result of a reduction in the company's reserve for returns and credit card chargebacks.
• The company's reserve for returns and credit card chargebacks, as a percentage of gross sales, decreased by 1.6% for the fourth quarter of 2011, compared to the fourth quarter of 2010.
• The decrease was primarily caused by a reduction in overall return rate, however, there can be no assurance that this trend will continue.
• Gross profit margin was 21.9% compared to 34.9% in the fourth quarter of 2010.
• The decrease in gross profit margin percentage was primarily attributable to an increase in inventory reserves of $2.4 million and a write-off of $1.0 million related to merchandise credits from suppliers that the Company believes may not be collected.
• The increase in inventory reserves was primarily the result of a shift in Company strategy with a view to accelerating inventory turns.
• Total operating expenses increased by approximately 30% to $12.6 million, from approximately $9.6 million for the fourth quarter of 2010.
• The increase in total operating expenses was attributable to an increase in e-commerce expenses (which are included in selling and fulfillment expenses) of $0.9 million related to the launching of the Belle & Clive web site, an increase in additional marketing expenses of $0.5 million related to customer acquisitions and an increase of general and administrative expenses of $1.5 million. As a percentage of net sales, total operating expenses increased to 42.8%, compared to 33.8% for the fourth quarter of 2010.
• Included in general and administrative expenses is a write-off and a reserve of $1.2 million in connection with a trade receivable that we now believe may not be collected in its entirety.
• Operating loss was $6.2 million, as compared to an operating income of $0.3 million in the fourth quarter of 2010.
• Adjusted EBITDA was negative $5.3 million, as compared to an adjusted positive EBITDA of $1.1 million in the fourth quarter of 2010.
• Net loss attributable to stockholders was approximately $6.2 million, as compared to net income of $0.3 million in the fourth quarter of 2010. The Company incurred a loss per share attributable to stockholders of $0.22 per share, compared to a net income of $0.01 per share, on a basic and diluted basis, in the fourth quarter of 2010.

Bluefly Inc is a leading online retailer of designer brands, fashion trends and superior value. Bluefly is headquartered at 42 West 39th Street in New York City, in the heart of the Fashion District.

Bluefly Inc

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