James Gallagher Joins Bluefly As Chief Financial Officer

Bluefly, Inc. (NASDAQ Capital Market: BFLY), a leading online retailer of designer brands, fashion trends and superior value ( www.bluefly.com / www.belleandclive.com), today announced that James Gallagher has joined the Company as Chief Financial Officer. Mr. Gallagher comes to Bluefly with over 33 years of extensive financial, strategic and operations experience with growth oriented international, entrepreneurial and corporate entities across a broad range of industries, including Internet focused marketing, e-commerce, entertainment, and technology companies.

Most recently, Mr. Gallagher was CFO at Vertro, a publicly traded Internet search engine, marketing and technology company that manages a network of websites and builds and markets browser based consumer applications. Prior to his experience at Vertro, Gallagher owned and operated Gallagher Enterprises, a strategic financial and management consulting firm he founded in 2001, which provided strategic consultancy on financial and operational issues as well as structuring and funding resources to start-ups and high-growth companies with revenues up to $150 million. Prior to Gallagher Enterprises, Gallagher held senior financial and operations positions at a number of growth oriented entrepreneurial entities including Vice President, Chief Financial Officer and Secretary at technology company, VRex, Inc., and Chief Financial Officer at publicly traded international software technology company, Viz-rt, Inc. Mr. Gallagher has also held senior-level financial positions at companies including Infocus Employee Services (a XEROX spin-off), Medsite, Inc., Sony Music Entertainment, Inc., and Reiss Media Enterprises, Inc. In addition, Gallagher also spent 10 years as a Senior Audit Manager at the international accounting and consulting firm of Arthur Andersen LLP.

"We're pleased to announce James's appointment as our new Chief Financial Officer," commented Joseph C. Park, Bluefly’s Chief Executive Officer. "James has a proven financial and operations track record, and a wealth of highly relevant experience in growth-oriented businesses. We believe that adding James to our executive team will enable us to better capitalize on strategic and growth opportunities at this exciting time in our Company's evolution," continued Mr. Park.

"This is a tremendous opportunity to join a Company that has embarked upon a new, focused strategy that is emphasizing lowering its customer acquisition costs, increasing lifetime value of its customers, and increasing its return on invested capital," commented Mr. Gallagher. "I believe my extensive and highly relevant experience will enable me to quickly contribute to and further enhance the Company's financial, operational and business strategy, and I greatly look forward to the opportunity and challenge of helping Bluefly achieve continued and sustainable growth and profitability."

About Bluefly, Inc.

Founded in 1998, Bluefly, Inc. (NASDAQ Capital Market: BFLY) is a leading online retailer of designer brands, fashion trends and superior value. Bluefly is headquartered at 42 West 39 th Street in New York City, in the heart of the Fashion District. In 2011, Bluefly expanded its portfolio, launching Belle & Clive, a Members-only shopping destination that presents highly-curated selections of important brands via limited-time sale events. For more information, please call 212-944-8000 or visit www.bluefly.com or www.belleandclive.com.

This press release may include statements that constitute “forward-looking statements,” usually containing the words “believe,” “project,” “expect” or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. The risks and uncertainties are detailed from time to time in reports filed by the Company with the Securities and Exchange Commission, including Forms 8-K, 10-Q and 10-K. These risks and uncertainties include, but are not limited to, the following: the Company’s history of losses and anticipated future losses; the risk of availability of additional capital, if required, to satisfy the Company’s needs for cash flow, inventory supply and growth of the business; the Company’s ability to realize benefits from new initiatives such as its members-only web site Belle and Clive; risks related to the Company’s shift in strategy to emphasize inventory turns over product margin; the risks that our reduction in spending on offline marketing in favor of online methods will continue to be successful; risks associated with the new Belle & Clive initiative; risks associated with the slow recovery from the unfavorable general economic environment; risks associated with affiliates of Rho Ventures, LP, affiliates of Soros Fund Management, private funds associated with Maverick Capital Ltd. and affiliates of Prentice Capital Management, LP each owning a significant portion of our stock; the potential failure to forecast revenues and/or to make adjustments to our operating plans necessary as a result of any failure to forecast accurately; unexpected changes in fashion trends; cyclical variations in the apparel and e-commerce markets; risks associated with our dependence on certain concentrations of suppliers for a material portion of our inventory; the risk of default by us under our credit facility and the consequences that might arise from us having granted a lien on substantially all of our assets under that agreement; risks of litigation related to the sale of unauthentic or damaged goods and litigation risks related to sales in foreign countries; our potential exposure to product liability claims in the event that products sold by us are defective; the dependence on third parties and certain relationships for certain services, including our dependence on UPS and USPS (and the risks of a mail slowdown due to terrorist activity) and our dependence on our third-party web hosting, fulfillment and customer service centers; online commerce security risks; our ability to raise additional capital, if needed, to support the growth of our business; risks related to brand owners’ efforts to limit our ability to purchase products indirectly; management of potential growth; the competitive nature of our business and the potential for competitors with greater resources to enter the business; the availability of merchandise; the need to further establish brand name recognition; risks associated with our ability to handle increased traffic and/or continued improvements to our Web Site; rising return rates; dependence upon executive personnel who do not have long-term employment agreements; the successful hiring and retaining of new personnel; risks associated with expanding our operations; risks associated with potential infringement of other’s intellectual property; the potential inability to protect our intellectual property; government regulation and legal uncertainties; uncertainties relating to the imposition of sales tax on Internet sales and our ability to utilize our net operating losses.

Copyright Business Wire 2010

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