Bluefly, the online retailer of off-price designer apparel, yesterday (28 February) reported a 31% hike in full-year revenues, but widened its net loss as it upped spending on marketing and advertising.

For the fourth quarter, net loss increased to $3.5m from $55,000. Loss per share decreased to $0.03 per share from $0.07 per share in last year's quarter.

Quarterly sales for the New York-based company were up 28% to $27.1m from $21.2m in the same period last year. Gross margin decreased by 150 basis points to 40.3% from 41.8% in fourth quarter 2005, while gross profit increased by nearly 23%. Average order size increased by over 17% to $271.98.

Operating loss widened to $3.7m from an operating income of $131,000 in the fourth quarter of 2005. This is blamed on $2.6m of stock-based compensation and a $1.3m rise in spending related to marketing and advertising.

For the full-year, net loss increased to $12.2m from $3.8m. Loss per share decreased to $0.23 per share from $0.54 per share.

2006 revenues soared by 31% to $77.1m from $58.8m in 2005. Gross margin increased by 100 basis points to 40.1% from 39.1% in 2005; and gross profit was up by 34%.

Operating loss widened to $12.1m from $3.1m in 2005, hit by stock-based compensation, higher marketing spend and executive bonuses.

However, Bluefly's CEO Melissa Payner said: "We are pleased by the company's record revenue for the year. Our strong growth in the face of slow cold-weather product sales throughout the industry is a testament to our continued progress and to the investment we have made in growing our customer file through our increased marketing efforts."

The retailer recently invested in new software to provide customers with a personalised shopping experience for navigating through its catalogue of more than 350 top American and European designers.