Internet retailer of designer brands at discount prices Bluefly Inc has attributed a five per cent slip in October sales to "significant" technical problems linked to the launch of its new Web site.

The New York-based company said net sales for the month fell to $2.5 million from $2.7m in the year-ago period amid technical problems that included "site instability, slower than usual page download times and a failure to display all available inventory on the site".

But for the third quarter, Bluefly posted a 42 per cent jump in gross profit to just over $2m from $1.4m in the year-ago period on the back of a 23 per cent increase in sales to $6.3m from $5.1m in 2001. Its net loss improved to $2.2m from $2.4m.

"The development of the new Web site, which is based on a new technology platform, is a major undertaking," said CEO Ken Seiff.

"I am therefore especially pleased by the 23 per cent increase in net sales and 42 per cent growth in gross profits, not only because these results were achieved in a weak retail environment, but also because these results came at a time when significant resources were focused on the long-term investment of developing a new web site."

Commenting on the technical difficulties he added: "I believe these problems and inefficiencies will be short-lived. In fact, we have already resolved many of the post-launch issues and I believe that the business is now beginning to benefit from the technology improvements we have added."