Maverick Capital and Prentice Capital Close on Purchase of $50 Million Stake in Bluefly

In connection with the transaction, private funds associated withSoros Fund Management LLC, collectively Bluefly's largest shareholder,converted all of their preferred stock into common stock. Bluefly willretain $25 million of the proceeds to grow its business and fundworking capital. The balance of $25 million was used to repay debt tothe Soros funds, as well as to pay accrued dividends on the preferredstock converted in connection with the transaction.

The transaction was arranged by the investment banking firm ofAllen & Company. Under the terms of the deal, Bluefly sold 60,975,610newly issued shares of common stock for an aggregate of $50 million,or $0.82 per share. The purchase price represented an 11% premium overthe closing price of the Company's common stock as of the date thatthe definitive agreement was signed and announced. The purchasedshares included approximately 200,000 shares that were purchased by aholder of our Series D Convertible Preferred Stock in connection withthe exercise of its preemptive rights. Following the closing, theSoros funds collectively own approximately 39% of the Company'soutstanding common stock, while Maverick and Prentice funds each ownapproximately 24%. Both Maverick and Prentice hold a right todesignate a representative on the board.

This press release does not constitute an offer of any securitiesfor sale. The offer and sale of the shares of common stock issued toentities affiliated with Maverick Capital and Prentice Capital werenot registered under the Securities Act, and such shares may not beoffered or sold absent registration under the Securities Act or anapplicable exemption therefrom.

About Bluefly, Inc.

Founded in 1998, Bluefly, Inc. (NASDAQ SmallCap: BFLY) is aleading online retailer of designer brands, fashion trends andsuperior value. Bluefly is headquartered at 42 West 39th Street in NewYork City, in the heart of the Fashion District. For more information,please call 212-944-8000 or visit www.bluefly.com.