E-retailer Bluefly targets flash-sale and off-price rivals

January 21, 2013 04:15 PM

Apparel e-retailer Bluefly Inc. is embarking on a new online strategy to recapture sales lost to flash-sale e-commerce sites that offer deep discounts for limited periods, the company told investors at the Needham Growth Conference last week organized by investment firm Needham & Co. LLC.

From 2010 to 2011, Bluefly’s sales grew 9.5% from $88.6 million to $97.0 million. In comparison, sales for flash-sale retailers in the Internet Retailer Top 500 guide, including ideeli Inc.,, Gilt Groupe, and One Kings Lane, increased 22% in the same period. Bluefly says it began losing market share to flash-sale retailers in 2008. Bluefly is No. 179 in the guide; One Kings Lane, No. 173; Gilt, No. 49; ideeli, No. 172; RueLaLa, No. 82; and JackThreads, No. 440.

Bluefly’s strategy includes bolstering the connection between its two brands,, and Belle & Clive, a flash-sale site it launched in 2011. 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 the conference. That could give Bluefly an edge over other flash-sale sites that don’t have that option for liquidating their unsold inventory.

Another part of this strategy is tapping into the e-commerce opportunity for selling apparel at a discount, Bluefly says. Neither TJX Companies Inc. nor Ross Stores Inc., two large bricks-and-mortar retailers specializing in off-price clothing, have e-commerce sites, Bluefly says. TJX, however, said last year e-commerce was part of the company’s future. In December, it bought e-retailer Sierra Trading Post.

By 2015, Bluefly forecasts off-price bricks-and-mortar retailers will sell $49.1 billion in merchandise. In 2011, sales at Ross and TJX totaled more than $30 billion, with expectations of $42 billion in two years, Bluefly says. “Online sales are still a small portion of this large and growing market,” Bluefly says.

With 139 retailers, apparel and accessories is the largest merchant category in the Top 500 and had 2011 combined sales of $22.26 billion. Bluefly's sales accounted for 0.44% of the overall category.




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