Bluefly, Inc (Nasdaq SmallCap: BFLY), an Internet retailer of designer fashions at outlet store prices (www.bluefly.com), today announced that it has renewed its relationship with Yahoo! Inc. (NasdaqNM:YHOO), a leading enabler of commerce on the web, to be a featured merchant on Yahoo! Shopping (http://shopping.yahoo.com).

Under the terms of the agreement, Bluefly will continue to have graphic merchant links within Yahoo! Shopping and will be featured throughout the Apparel, Accessories and Shoes category. In addition, Yahoo! has agreed to include Bluefly's inventory of top designer merchandise in Yahoo! Shopping's search results.

"We closely analyse the performance of our online marketing relationships," said Alanna Richter, vice president of marketing at Bluefly, Inc. "Our experience over the last year has proven that Yahoo! Shopping is a good means for Bluefly to acquire many valuable customers in a cost effective manner."

In the last 12 months, Bluefly has tested a variety of marketing initiatives, expanding programs that it believes have been successful and terminating those that have not met its rigorous standards. Bluefly believes that this approach has been instrumental in lowering its new customer acquisition cost by nearly 68 per cent to $57.45 for the third quarter of 2000 from $178.66 in the same period a year ago.

"We continue to expand Yahoo! Shopping to provide consumers with quality merchants and products," said Rob Solomon, director of production, Yahoo! Shopping. "We are pleased to continue our relationship with Bluefly to offer Yahoo! Shopping consumers a wider selection of designer fashions at competitive prices."

About Bluefly
Bluefly is a NASDAQ SmallCap public company based in New York City, in the heart of the fashion district. The online merchant has established strategic relationships with many of the most visited Web Sites and portals including Yahoo!, AOL, Excite, MSN, Netcenter and Women.com. For more information, visit www.bluefly.com.