Bluefly, Inc (NASDAQ SmallCap: BFLY), an online outlet for designer fashions and home furnishings (www.bluefly.com), announced today that its net revenue for the second quarter of 2000 grew to a record $4,327,000, increasing over 480 per cent from its second quarter 1999 net revenue of $741,000.

For the quarter, gross margin was 24.4 per cent and average order size was $98.94. Bluefly's net loss for the second quarter was $5,301,000. Including preferred stock dividends, the loss was $5,500,000, or $1.12 per share.

"We are extremely pleased with our second quarter results, especially considering that we achieved triple digit revenue growth while operations became more efficient in a number of ways," said Ken Seiff, CEO of Bluefly.

Strong revenue growth was spurred by a surge in new customer acquisition and an increase in sales generated by repeat customers. During the second quarter of 2000, Bluefly added 36,063 new customers, up by more than 365 per cent from the 7,734 new customers added in the second quarter of 1999.

While adding new customers, Bluefly also saw many of its existing customers return to Bluefly for additional purchases. Repeat customers accounted for approximately 46 per cent of Bluefly's revenues, its highest level ever and up from 40 per cent in the second quarter of 1999.

Bluefly has added nearly 130,000 registered users during the second quarter, up more than 250 per cent from the 36,680 registered users added in the second quarter of 1999. At the end of June, Bluefly's total registered user base was nearly 640,000 and its customer list, which is part of its registered user base, exceeded 120,000.

Reducing the customer acquisition cost has been a focus for Bluefly in the past year. In the second quarter of 2000, Bluefly saw its new customer acquisition cost fall by nearly 70 per cent to $73.21 from $239.46 for the second quarter of 1999.

"Learning more about our customer through data mining, targeting our advertising more effectively, tailoring our selection of merchandise to try to meet our customers' needs and improving our website design have all contributed to this dramatic reduction in new customer acquisition cost," Seiff said.

Bluefly is a NASDAQ SmallCap public company based in New York City, in the heart of the fashion district. Distinguishing itself with discounts of up to 75 per cent, products from more than 350 designers and a 90-day money back guarantee, Bluefly.com aims to be the world's first full service outlet store for designer fashions.

Its innovative MyCatalog feature is designed to eliminate the 'hit-or-miss' aspect of off-price shopping by allowing shoppers to see only those products that are available for sale and match their interests. The online merchant has established strategic alliances with many of the most visited Web Sites and portals including AOL, Excite, MSN, Netcenter, Women.com and Yahoo!