Bluefly swings to Q4 loss on expansion costs

US: Bluefly swings to Q4 loss on expansion costs

By Leonie Barrie | 10 April 2012

Swings to Q4 net loss of $6.2m from profit of $0.3m
Net sales rose 3% to $29.4m from $28.6m
Gross profit margin fell to 21.9% from 34.9%

Online designer retailer Bluefly Inc has slipped to a fourth quarter loss after higher inventories and the cost of launching the Belle & Clive flash sale site outweighed a rise in sales.

"Fiscal 2011 was a pivotal period for our company," noted CEO Joseph Park. "We implemented key strategies to position our company for future growth.

"To this end, we expanded our category reach with the launch of Eyefly.com in June 2011 and just prior to year end introduced Belle & Clive...enabling us to leverage the 20m unique visitors to Bluefly.com and our more than 350 brand relationships to offer the most important brands with limited time offers at members only pricing."

For the year to 31 December, net losses widened to $11.0m from $4.0m, as lower gross profit margins, and a 6% rise in operating expenses offset higher sales.

Net sales rose 9% to $96.3m thanks to continued demand for luxury designer merchandise. But gross profit margin fell to 29.4% from 37.5% as a result of higher inventory reserves, a write-off of $1.0m related to merchandise credits from suppliers, and an increase in promotional activity.

Sectors: Apparel, Finance, Retail

Companies: Bluefly