USA: Bluefly.com Announces Streamlined Operating Plan
Online designer fashion retailer Bluefly Inc is to cut 32 jobs, approximately 34 per cent of its workforce, in an attempt to push the business into profitability in the fourth quarter of 2002, improve efficiency and reduce its need for additional capital.
As part of the plan, the company also intends to reduce marketing and other operating expenses. The cutbacks are expected to cost $600,000.
Based on current plans and assumptions, Bluefly believes that these measures will see it reach profitability in the fourth quarter of 2002. The company also says it has enough cash on hand to fund operations for the next 12 months, and that less than $5 million in additional investment capital will be required to fund the operation until it reaches profitability.
"The decision to reduce overhead and streamline our operations was not an easy one but it clearly was required if Bluefly is to become profitable before the end of 2002,'' said Ken Seiff, chief executive officer of Bluefly Inc.
"The company has benefited greatly from the participation of many of the individuals who are being let go in this process. Their contribution helped build a foundation upon which we plan to expand the business in a more efficient manner. On behalf of all of our shareholders, I would like to express my gratitude to these employees,'' Seiff added.
"We are proud of how Bluefly has consistently delivered value and quality to its customers and suppliers while at the same time performing well in a challenging retail environment,'' said Neal Moszkowski, a partner at Soros Private Equity Partners. "Achieving profitability, while maintaining the value and quality Bluefly offers its customers and suppliers, is clearly the appropriate next step and we will continue to be supportive in this regard."
The company also announced the addition of Josephine Esquivel to its board of directors. Ms Esquivel is a former senior apparel, textiles, footwear and luxury goods equity analyst with Morgan Stanley Dean Witter.
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