Apparel retailer Bluefly Inc., a pioneer web-only retailer that launched in 1998, made it through the early years of online retailing while other startups faltered. But it has failed to have a profitable year since at least 2008, and it now has a new owner.
Private investment firm Clearlake Capital Group is buying 89% of shares held by its principal shareholders, which, according to Yahoo Finance, are institutional and mutual fund organizations. Clearlake also may buy other outstanding shares, at 10 cents each, to bring its ownership total to more than 90%. Overall, Bluefly has issued about 28.9 million shares. Clearlake would not disclose what the total deal is valued at.
Clearlake says the deal closed today. Bluefly shares are expected to cease trading on the Nasdaq stock market before the market opens Friday, Clearlake says.
“With this transaction, Bluefly will be well-capitalized and well-positioned for growth, building on its loyal following and continued strong traffic,” says Bluefly CEO Joseph Park.
Bluefly’s financial challenges came to a head earlier this year when it cautioned that if a deal was not struck its future might be in jeopardy. In April, the company said it was delaying its annual report as it tried to secure financing. When the annual results were released later that month, they revealed that sales decreased 3% to $93.4 million, but the retailer’s net loss ballooned to $24.9 million in 2012 from $11.4 million in 2011. Also according to the 2012 report, Bluefly has not posted a profit since 2008
Earlier this week, Bluefly reported first quarter results that showed an 18.5% decrease in sales.
Bluefly, however, pins its hope on a strategy unveiled in January to regain market share by improving the sales connection between its Bluefly.com and BelleandClive.com web sites. Bluefly.com offers less expensive products and doesn’t set a time limit on availability, while Belle & Clive sells more luxury brands through limited-time offers. Bluefly will sell its unsold inventory from Belle & Clive on Bluefly, according to slides the e-retailer presented at an investor conference.
Bluefly is No. 206 in the Internet Retailer Top 500 guide.
Clearlake Capital also is an investor in Swiss Watch International.