Bluefly makes progress, but low on cash

Bluefly Inc. (Nasdaq: BFLY) made progress in its second quarter, but warned that it has to pursue "strategic alternatives" because it's running low on cash.

Shares in the company closed at 2 9/16 Wednesday, ahead of its earnings report. Like many e-tailers, Bluefly's stock has bottomed out over the past few months. And like CDNow, which went hunting for a buyer when it couldn't come up with more cash, Bluefly is now seeking "strategic alternatives."

Bluefly had a mere $3.9 million in cash as of June 30, $4 million less than it had as of Dec. 31. With that pace, Bluefly will be broke by the end of the year. Bluefly is working with Credit Suisse First Boston to advise it on alternatives such as "strategic partnerships or joint ventures, or a sale of the company."

Like other e-tailers, the online outlet for designer fashions and home furnishings is finding that funding has dried up for business-to-consumer companies.

The company said net revenue was $4.33 million, up 480 percent from its second quarter 1999 net revenue of $741,000. Gross margin was 24.4 percent and average order size was $98.94.

Net loss for the second quarter was $5.3 million, or $1.12 per share, topping First Call's estimated loss of $1.39 a share, but widening from $3 million in losses last year.

The company said it achieved its highest revenue, acquired more new customers than ever before, saw repeat customers account for a greater share of our revenues and added more registered users than ever before his quarter.