bluefly goldmansachs presentation 052407
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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
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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
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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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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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