<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 28, 1999
------------------
BLUEFLY, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW YORK 333-22895 13-3612110
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
42 West 39th Street, New York, New York 10018
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 944-8000
-------------------------
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 5. OTHER EVENTS.
On July 28, 1999, Bluefly, Inc. (the "Company") announced that it
had entered into an Investment Agreement with an investor group led by
affiliates of Soros Private Equity Partners LLC (the "Investor Group"), pursuant
to which the Investor Group will purchase 500,000 shares of newly-designated
Series A Convertible Preferred Stock, $.01 par value, of the Company (the
"Series A Preferred Stock") for an aggregate of $10 million. The Series A
Preferred Stock to be issued to the Investor Group pursuant to the Investment
Agreement is convertible into 952,381 shares of the Company's Common Stock, $.01
par value.
The text of the press release relating to such investment is
attached hereto as Exhibit 99.1 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit 99.1 - Press release dated July 28, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report be signed on its behalf by the
undersigned hereunto duly authorized.
BLUEFLY, INC.
Date: August 3, 1999 By:/s/ E. Kenneth Seiff
---------------------------------------
E. Kenneth Seiff
Chairman of the Board, Chief Executive
Officer and President
<PAGE>
Exhibit 99.1
FOR IMMEDIATE RELEASE Media Relations: Margaret McCann
212-944-8000 x229
Investor Relations: Jon Freedman
212-944-8000 x247
SOROS LED TEAM TO INVEST $10 MILLION IN ONLINE RETAILER BLUEFLY.COM
New York, NY - July 28, 1999 - Bluefly, Inc. (NASDAQ SmallCap: BFLY), a leading
Internet retailer of designer fashions and home furnishings at outlet store
prices (www.bluefly.com), announced today that an investor group led by
affiliates of Soros Private Equity Partners LLC has agreed to invest $10 million
in Bluefly.com, in a transaction that will provide capital to accelerate the
company's marketing and advertising efforts and aggressively build inventory in
time for the Christmas shopping season. The investor group also includes Pilot
Capital Corporation, a firm specializing in private equity investments in
technology companies. Pilot was founded in 1987 by Robert McCabe, a former
partner at Lehman Brothers.
"Over the past few months, we have explored strategic investment opportunities
with a number of potential partners, including portals, other e-commerce
retailers and brick-and-mortar apparel retailers," said Ken Seiff, Chief
Executive Officer of Bluefly.com. "Although we saw many interesting
opportunities, we feel that the Soros group best understood our business, and we
are delighted to welcome them into our company as significant investors. At the
same time, we are open to exploring new opportunities with other strategic
investors, and we expect the Soros group to play an active role in that
process," added Seiff.
"We are excited to be working closely with this management team as they execute
on their ambitious business plan," stated Neal Moszkowski, a partner at Soros
Private Equity Partners. "We believe Bluefly has an unusual market opportunity
to build a large scale e-commerce business that delivers exceptional service and
value to its customers and suppliers," added Mr. Moszkowski. In connection with
the transaction, Mr. Moszkowski will be joining Bluefly's Board of Directors.
Under the terms of the financing, the Soros led investor group will purchase
preferred stock from the company, which is convertible into common stock at the
rate of $10.50 per share. The company can force the conversion of the preferred
stock at any time if the average closing price of its common stock is $31.50 or
higher for thirty consecutive trading days. The investment will give the Soros
led group a 19.5% voting and equity interest in Bluefly, making it the company's
largest group of shareholders. The preferred stock will earn dividends at the
rate of 8% per year, payable in cash or stock, at the company's option, upon
conversion.
Bluefly is a NASDAQ SmallCap public company. Headquartered in New York City, in
the heart of the fashion district, Bluefly aims to be the most enjoyable way to
shop for designer and name brand apparel and home accessories at savings of 25
to 75 percent off of retail prices. 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 seven of
the twelve most visited Web Sites and portals including AOL, Excite, Go Network,
<PAGE>
Lycos, MSN, Netcenter, Tripod and Yahoo!. According to Media Metrix research,
Bluefly is the most visited outlet store for apparel and home accessories on the
Internet.
Soros Private Equity Partners LLC ("SPEP") is an affiliate of Soros Fund
Management LLC. SPEP is responsible for making direct private equity investments
on behalf of Quantum Industrial Partners LDC, the principal operating subsidiary
of Quantum Industrial Partners Ltd., a $2.6 billion investment fund, and certain
other affiliates of the Quantum Group of Funds. The Quantum Group of Funds is
not generally available to U.S. investors.
This press release may include statements that constitute "forward-looking"
statements, usually containing the words "believe", "project", "expect", or
similar expressions. These statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements inherently involve risks and uncertainties that could
cause actual results to differ materially from the forward-looking statements.
The risks and uncertainties are detailed from time to time in reports filed by
the company with the Securities and Exchange Commission, including Forms 8-A,
8-K, 10-QSB, and 10-KSB. These risks and uncertainties include, but are not
limited to, the following: the competitive nature of the business and the
potential for competitors with greater resources to enter such business; risk of
litigation for sale of unauthentic or damaged goods and litigation risks related
to sales in foreign countries; consumer acceptance of the Internet as a medium
for purchasing apparel; the Company's limited working capital and need for
additional financing; recent losses and anticipated future losses; the startup
nature of the Internet business; the capital intensive nature of such business
(taking into account the need for advertising to promote such business); risk of
litigation for sale of unauthentic or damaged goods; the dependence on third
parties and certain relationships for certain services; the successful hiring
and retaining of personnel; the dependence on continued growth of online
commerce; rapid technological change; year 2000 issues; online commerce security
risks; governmental regulation and legal uncertainties; management of potential
growth; and unexpected changes in fashion trends.
##
