Bluefly Goldmansachs Presentation 052407

8/4/2019 Bluefly Goldmansachs Presentation 052407

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bluefly, inc

May, 2007



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what is bluefly?

the online source for the latest in fashion from best known europeanand american designers at a value

product assortment: women’s apparel 48% of business1

women’s accessories 28% of business men’s fashion and accessories 21% home 3%

accessible luxury to the broad market over 10,000 styles from great designers usually from 40%-75% off

retail

new merchandise added to the site daily

12006 percent of total company net sales



3

merchandise strategy/value proposition

the original premise of bluefly is a winning one: wesurvived the dot com hysteria

but in order to grow, we needed to differentiate and havea competitive edge

the first phase was to develop a new merchandisingstrategy that shaped the future of the company

once we saw it could be executed successfully over 3

seasons, we were able to build from our new positioning



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new merchandising strategyled to stronger gross margins

focus on pricing/initial margin

We constantly evaluate the

merchandise mix

We buy direct from brands earlyin the season

We keep site fresh – daily newarrivals

21.3%

34.2%

38.0% 37.4% 38.6% 40.3%

41.8%

40.3%

20%

25%

30%

35%

40%

45%

50%

Q3 Q4

Gross Margin %

2003

2004

2005

2006



5

the new bluefly

in-season and on-trend fashion when the customer wants it

nimble and dynamic : we are responsive to customer’s

needs and are able to update the site daily

positioning: f ashion first – then the value

an authoritative/credible fashion source brands from contemporary to high end designer

upscale messaging/presentation featuring the season’s key trends



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7



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10



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bluefly positioning – value vs. high quality clothing

Amazon.com

Barneys.com

Bloomingdales.com

Bluefly.com

eLuxury.com

JCrew.com

Macys.com

NeimanMarcus.com

Nordstrom.com

Overstock.com

SaksFifthAvenue.com

Shopbop.com

SmartBargains.com

VictoriaSecret.com

Yoox.com

Zappos.com

0

10

20

30

40

50

60

70

80

90

0 10 20 30 40 50 60 70 80 90 100

Value

H i g h Q u a l i t y C

l o t h i n g

Amazon.com

Barneys.com

Bloomingdales.com

Bluefly.com

eLuxury.com

JCrew.com

Loehmanns.com

Macys.com

NeimanMarcus.com

Nordstrom.com

Overstock.com

SaksFifthAvenue.com

Shopbop.com

SmartBargains.com

VictoriaSecret.com

Yoox.com

Zappos.com

Source: synovate



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bluefly positioning – value vs. high quality clothing

Barney's

Bloomingdale's

Bluefly.com

Filene's Basement

JCrew

Loehmanns

Macy's

Neiman Marcus Nordstrom

Saks Fifth Avenue

TJ Maxx

0

10

20

30

40

50

60

70

80

90

0 10 20 30 40 50 60 70 80 90 100

Value

H i g h Q u a l i t y

Barney's

Bloomingdale's

Bluefly.com

Filene's Basement

JCrewLoehmanns

Macy's

Neiman Marcus

Nordstrom

Saks Fifth Avenue

TJ Maxx

Source: synovate



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our customer

demographics- the facts 75%+ women

mean age 35

61% single

hh income $100,000+

psychographics- the attitude she loves fashion, shops often and spends a lot

she’s pop-culture savvy

shopping is an essential – not just an incidental part of her life shopping is an emotional – more than a rational experience



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our relationship

in a word: loyalty. loves not likes.

we’ve created a following; a fan base, perhaps even addicts

we put our new merchandising strategy out there and theyplayed it right back to us:

we stand alone with a unique position in the marketplace



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marketing bluefly: television

launched first campaign october 2005

embodied the core ethos of bluefly:

a universally relevant experience among women with the “shoppinggene”

projected the image of the target customer: strong, confident and

of course, emotional.

Awareness of bluefly is increasing



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marketing bluefly-television

second campaign fall 2006

extremely targeted media allowed us to move the dial Ran spots Sunday through Wednesday night only

Programs with strong fashion content: Sex & the City, Projectrunway, gilmore girls, america’s top model

tremendous results: 60% increase in traffic during times our spots ran opt-in customer file increased to 1,300,000

new email addresses acquired in Fall 06 increased 50%



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A winning combination

Marketing that creates new customers fall 2006 marketing spend 50% online & 50% offline

Added to our loyal and active customer file

average season (6 months) sales per existing customer is $600 the most active customers visit website 6+ times per month

57% of sales from existing customers



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financial highlights



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2006 financial highlights

net revenue grew by 31%

gross margin $ grew by 35%

gross margin % was strong at 40.1% (up 100 basis pts vs. 2005)

Investment in marketing was $12.6 million –the first full year of the national ad campaign

strong balance sheet

re-capitalization – june 2006 raised $50 million 61million shares at $.82 soros converted all of their preferred stock



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2007 q1 financial highlights

net revenue grew by 31%

gross margin $ grew by 22.4% GM$ per order grew to $62.91

gross margin % was 37.9% vs 40.5% in q1 2006 Merchandising mix – designer accessories and shoes Weakness of the $ against the Euro Shipping expense (1% pt)

Operating profit excluding 123r expenses improved by $941,000

Customers grew by over 49,000 or 27%

Growth in inventory slowed vs last year (8% vs 26%)



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order economicsyear ended 2006

$ %

average order size $257.64

returns (101.25) 39.3%

bad debt/other (0.52) 0.2%

net revenue 155.87 60.5%

gross margin 62.50 40.1%

fulfillment/cc fees 8.76 5.6%variable contribution before customer

acquisition and overhead 53.75$ 34.5%



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increasing average order size

average order value (full year)

$100

$150

$200

$250

$300

2000 2001 2002 2003 2004 2005 2006



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$10

$20

$30

$40

$50

$60

$70

$80

FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006

($Ms)

strong revenue growth

c a g r 2 8

. 0 %



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$(22.0)

$(17.0)

$(12.0)

$(7.0)

$(2.0)

2000 2001 2002 2003 2004 2005 2006

Operating (Loss) Marketing $

operating losses

(Ms)

note: excludes effect of fas 123r



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the bluefly opportunity

We have clear and well differentiated position that deliversreal value to our customers

In a growing market (on-line apparel and luxury market)

We have among the best gross margins in the industry powerful order economics

An expanding and loyal customer base (in the U.S.)

A clear opportunity to grow internationally

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Bluefly Goldmansachs Presentation 052407

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