<SUBMISSION>
<ACCESSION-NUMBER>0000921530-02-000468
<TYPE>SC 13D/A
<PUBLIC-DOCUMENT-COUNT>5
<FILING-DATE>20020820
<GROUP-MEMBERS>GEORGE SOROS
<GROUP-MEMBERS>QIH MANAGEMENT INVESTOR, L.P.
<GROUP-MEMBERS>QIH MANAGEMENT, INC.
<GROUP-MEMBERS>QUANTUM INDUSTRIAL PARTNERS LDC
<GROUP-MEMBERS>SFM DOMESTIC INVESTMENTS LLC
<GROUP-MEMBERS>SOROS FUND MANAGEMENT LLC
<SUBJECT-COMPANY>
<COMPANY-DATA>
<CONFORMED-NAME>BLUEFLY INC
<CIK>0001030896
<ASSIGNED-SIC>5961
<IRS-NUMBER>133612110
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>SC 13D/A
<ACT>34
<FILE-NUMBER>005-52401
<FILM-NUMBER>02744037
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>42 WEST 39TH ST
<CITY>NEW YORK
<STATE>NY
<ZIP>10018
<PHONE>2129448000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>42 WEST 39TH ST
<CITY>NEW YORK
<STATE>NY
<ZIP>10018
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>PIVOT RULES INC
<DATE-CHANGED>19970305
</FORMER-COMPANY>
</SUBJECT-COMPANY>
<FILED-BY>
<COMPANY-DATA>
<CONFORMED-NAME>SOROS FUND MANAGEMENT LLC
<CIK>0001029160
<IRS-NUMBER>133914976
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>SC 13D/A
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>888 SEVENTH AVENUE 33RD FLOOR
<CITY>NEW YORK
<STATE>NY
<ZIP>10106
<PHONE>2128721054
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>C/O AKIN, GUMP, STRAUSS,HAUER,FELD,
<STREET2>399 PARK AVENUE
<CITY>NEW YORK
<STATE>NY
<ZIP>10022
</MAIL-ADDRESS>
</FILED-BY>
<DOCUMENT>
<TYPE>SC 13D/A
<SEQUENCE>1
<FILENAME>bluefly_13d-080902.txt
<TEXT>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  SCHEDULE 13D


                    Under the Securities Exchange Act of 1934
                               (Amendment No. 14)*

                                  BLUEFLY, INC.
                    -----------------------------------------
                                (Name of Issuer)

                     Common Stock, Par Value $0.01 Per Share
                    ----------------------------------------
                         (Title of Class of Securities)

                                    096227103
                    ----------------------------------------
                                 (CUSIP Number)

                              Stephen M. Vine, Esq.
                    Akin, Gump, Strauss, Hauer & Feld, L.L.P.
                               590 Madison Avenue
                            New York, New York 10022
                                 (212) 872-1000
                    -----------------------------------------
                  (Name, Address and Telephone Number of Person
                Authorized to Receive Notices and Communications)

                                 August 9, 2002
                              --------------------
                      (Date of Event which Requires Filing
                               of this Statement)

If the filing person has previously  filed a statement on Schedule 13G to report
the  acquisition  that is the subject of this  Schedule  13D, and is filing this
schedule because of ss.ss.240.13d-1(e),  240.13d-1(f) or 240.13d-1(g), check the
following box .

Note:  Schedules  filed in paper format shall include a signed original and five
copies of the  schedule,  including  all exhibits.  See  ss.240.13d-7  for other
parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting  person's
initial filing on this form with respect to the subject class of securities, and
for  any  subsequent   amendment   containing   information  which  would  alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the  Securities  Exchange  Act of
1934 ("Act") or otherwise  subject to the liabilities of that section of the Act
but  shall be  subject  to all other  provisions  of the Act  (however,  see the
Notes).


                          Continued on following pages
                               Page 1 of 36 Pages
                             Exhibit Index: Page 13
<PAGE>
                                  SCHEDULE 13D

CUSIP No. 096227103                                          Page 2 of 36 Pages


1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                         QUANTUM INDUSTRIAL PARTNERS LDC

2        Check the Appropriate Box if a Member of a Group (See Instructions)
                                                     a.[___]
                                                     b.[ X ]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  WC

5        Check if Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)



6        Citizenship or Place of Organization

                  Cayman Islands

                           7        Sole Voting Power
 Number of                                  22,825,650
   Shares
Beneficially               8        Shared Voting Power
  Owned By                                   0
   Each
 Reporting                 9        Sole Dispositive Power
  Person                                   22,825,650
   With
                           10       Shared Dispositive Power
                                            0

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                                        22,825,650**

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)
                                         [ X ]

13       Percent of Class Represented By Amount in Row (11)

                                          81.72%**

14       Type of Reporting Person (See Instructions)

                  OO; IV

---------------
** See Item 6
<PAGE>
                                  SCHEDULE 13D

CUSIP No. 096227103                                          Page 3 of 36 Pages


1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  QIH MANAGEMENT INVESTOR, L.P.

2        Check the Appropriate Box if a Member of a Group (See Instructions)
                                                     a. [___]
                                                     b. [ X ]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  AF

5        Check if Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)

                [___]

6        Citizenship or Place of Organization

                  Delaware

                           7        Sole Voting Power
 Number of                                  22,825,650
  Shares
Beneficially               8        Shared Voting Power
 Owned By                                   0
   Each
 Reporting                 9        Sole Dispositive Power
  Person                                   22,825,650
   With
                           10       Shared Dispositive Power
                                            0

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                                            22,825,650**

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)
                                            [ X ]

13       Percent of Class Represented By Amount in Row (11)

                                            81.72%**

14       Type of Reporting Person (See Instructions)

                  PN; IA

---------------
** See Item 6
<PAGE>
                                  SCHEDULE 13D

CUSIP No. 096227103                                          Page 4 of 36 Pages


1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  QIH MANAGEMENT, INC.

2        Check the Appropriate Box if a Member of a Group (See Instructions)
                                                     a. [___]
                                                     b. [ X ]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  AF

5        Check if Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)

                [__]

6        Citizenship or Place of Organization

                  Delaware

                           7        Sole Voting Power
 Number of                                  22,825,650
  Shares
Beneficially               8        Shared Voting Power
 Owned By                                   0
   Each
 Reporting                 9        Sole Dispositive Power
   Person                                   22,825,650
   With
                           10       Shared Dispositive Power
                                            0

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                                            22,825,650**

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)
                                            [ X ]

13       Percent of Class Represented By Amount in Row (11)

                                            81.72%**

14       Type of Reporting Person (See Instructions)

                  CO

---------------
** See Item 6
<PAGE>
                                  SCHEDULE 13D

CUSIP No. 096227103                                          Page 5 of 36 Pages


1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  SOROS FUND MANAGEMENT LLC

2        Check the Appropriate Box if a Member of a Group (See Instructions)
                                                     a. [___]
                                                     b. [ X ]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  AF

5        Check if Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)

                [___]

6        Citizenship or Place of Organization

                  Delaware

                           7        Sole Voting Power
 Number of                                  22,825,650
  Shares
Beneficially               8        Shared Voting Power
 Owned By                                   0
   Each
 Reporting                 9        Sole Dispositive Power
  Person                                   22,825,650
   With
                           10       Shared Dispositive Power
                                            0

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                                            22,825,650**

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)
                                            [ X ]

13       Percent of Class Represented By Amount in Row (11)

                                            81.72%**

14       Type of Reporting Person (See Instructions)

                  OO; IA
---------------
** See Item 6
<PAGE>
                                  SCHEDULE 13D

CUSIP No. 096227103                                          Page 6 of 36 Pages


1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  SFM DOMESTIC INVESTMENTS LLC

2        Check the Appropriate Box if a Member of a Group (See Instructions)
                                                     a. [___]
                                                     b. [ X ]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  WC

5        Check if Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)

                [___]

6        Citizenship or Place of Organization

                  Delaware

                           7        Sole Voting Power
 Number of                                  746,885
  Shares
Beneficially               8        Shared Voting Power
 Owned By                                   0
   Each
 Reporting                 9        Sole Dispositive Power
  Person                                   746,885
   With
                           10       Shared Dispositive Power
                                            0

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                                            746,885**

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)
                                            [X]

13       Percent of Class Represented By Amount in Row (11)

                                            6.81%**

14       Type of Reporting Person (See Instructions)

                  OO
---------------
** See Item 6
<PAGE>
                                  SCHEDULE 13D

CUSIP No. 096227103                                          Page 7 of 36 Pages


1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  GEORGE SOROS (in the capacity described herein)

2        Check the Appropriate Box if a Member of a Group (See Instructions)
                                                     a. [___]
                                                     b. [ X ]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  AF

5        Check if Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)

                [__]

6        Citizenship or Place of Organization

                  United States

                           7        Sole Voting Power
 Number of                                  23,572,535
  Shares
Beneficially               8        Shared Voting Power
Owned By                                    0
  Each
 Reporting                 9        Sole Dispositive Power
  Person                                   23,572,535
  With
                           10       Shared Dispositive Power
                                            0

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                                            23,572,535**

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)
                                            [___]

13       Percent of Class Represented By Amount in Row (11)

                                            82.70%**

14       Type of Reporting Person (See Instructions)

                  IA

---------------
** See Item 6
<PAGE>
                                                              Page 8 of 36 Pages


     This  Amendment  No. 14 to Schedule 13D relates to shares of Common Stock,
$0.01 par value per share (the "Shares"), of Bluefly, Inc. (the "Issuer").  This
Amendment No. 14  supplementally  amends the initial  statement on Schedule 13D,
dated August 6, 1999, and all  amendments  thereto  (collectively,  the "Initial
Statement"),  filed by the Reporting Persons (as defined herein). This Amendment
No. 14 is being  filed by the  Reporting  Persons to report that QIP (as defined
herein) and SFM Domestic  Investments  (as defined  herein) have entered into an
agreement  with the Issuer as  described  herein,  whereby QIP and SFM  Domestic
Investments  each  purchased  from  the  Issuer  shares  of  preferred  stock as
described  herein.  Capitalized terms used but not defined herein shall have the
meanings  ascribed to them in the Initial  Statement.  The Initial  Statement is
supplementally amended as follows.

Item 2.  Identity and Background

     This  Statement is being filed on behalf of each of the  following  persons
(collectively, the "Reporting Persons"):

             (i) Quantum Industrial Partners LDC ("QIP");

             (ii) QIH Management Investor, L.P. ("QIHMI");

             (iii) QIH Management, Inc. ("QIH Management");

             (iv) Soros Fund Management LLC ("SFM LLC");

             (v) SFM Domestic Investments LLC ("SFM Domestic Investments"); and

             (vi) Mr. George Soros ("Mr. Soros").

     This  Statement  relates to the Shares held for the accounts of QIP and SFM
Domestic Investments.

Item 3.  Source and Amount of Funds or Other Consideration

     The  information  set  forth in Item 6 hereof  is  hereby  incorporated  by
reference into this Item 3.

     QIP expended  approximately  $2,033,430 of its working  capital to purchase
the  securities  reported  herein as being acquired since June 21, 2002 (60 days
prior to the date  hereof).  SFM  Domestic  Investments  expended  approximately
$66,570 of its working  capital to purchase the  securities  reported  herein as
being acquired since June 21, 2002 (60 days prior to the date hereof).

Item 4.   Purpose of Transaction

     The  information  set  forth in Item 6 hereof  is  hereby  incorporated  by
reference into this Item 4.

     The  Reporting  Persons  reserve  the  right  to  acquire,  or  cause to be
acquired,  additional  securities  of the Issuer,  to dispose of, or cause to be
disposed,  such securities at any time or to formulate other purposes,  plans or
proposals  regarding the Issuer or any of its  securities,  to the extent deemed
advisable in light of general  investment and trading  policies of the Reporting
Persons, market conditions or other factors.
<PAGE>
                                                              Page 9 of 36 Pages


Item 5.  Interest in Securities of the Issuer

     (a) (i) Each of QIP,  QIHMI,  QIH  Management and SFM LLC may be deemed the
beneficial owner of 22,825,650 Shares  (approximately 81.72% of the total number
of  Shares  outstanding  assuming  the  exercise  and  conversion  of all of the
securities  (excluding the Series 2002 Preferred  Stock) held for the account of
QIP). This number consists of A) 5,287,082  Shares, B) 3,806,923 Shares issuable
upon the conversion of 445,410 shares of Series A Preferred Stock, C) 12,829,524
Shares  issuable upon the  conversion of 8,607,843  shares of Series B Preferred
Stock,  D) 363,113  Shares  issuable  upon the exercise of warrants held for the
account of QIP, E) 96,830  Shares  issuable  upon the exercise of Warrant No. 11
held for the  account of QIP, F) 58,098  Shares  issuable  upon the  exercise of
Warrant No. 13 held for the account of QIP, G) 96,830  Shares  issuable upon the
exercise of Warrant No. 15 held for the  account of QIP,  and H) 287,250  Shares
issuable upon the exercise of Warrant No. 17 held for the account of QIP.

     (ii) SFM Domestic Investments may be deemed the beneficial owner of 746,885
Shares  (approximately  6.81% of the total number of Shares outstanding assuming
the exercise and  conversion of all the  securities  (excluding  the Series 2002
Preferred  Stock)  held for its  account).  This  number  consists of A) 172,995
Shares,  B) 124,701  Shares  issuable  upon the  conversion  of 14,590 shares of
Series A Preferred  Stock held for its account,  C) 419,666 Shares issuable upon
the  conversion  of  281,571  shares of Series B  Preferred  Stock  held for its
account,  D) 11,887  Shares  issuable upon the exercise of warrants held for its
account,  E) 3,170 Shares  issuable upon the exercise of Warrant No. 12 held for
its account,  F) 1,902 Shares  issuable upon the exercise of Warrant No. 14 held
for its account,  G) 3,170 Shares  issuable  upon the exercise of Warrant No. 16
held for its account,  and H) 9,394 Shares issuable upon the exercise of Warrant
No. 18 held for its account.

     (iii) Mr. Soros may be deemed the  beneficial  owner of  23,572,535  Shares
(approximately  82.70% of the total  number of Shares  outstanding  assuming the
exercise and  conversion  of all of the  securities  (excluding  the Series 2002
Preferred  Stock) held for the  accounts of QIP and SFM  Domestic  Investments).
This  number  consists  of A)  5,287,082  Shares held for the account of QIP, B)
3,806,923  Shares  issuable upon the  conversion  of 445,410  shares of Series A
Preferred Stock held for the account of QIP, C) 12,829,524  Shares issuable upon
the  conversion  of  8,607,843  shares of Series B Preferred  Stock held for the
account of QIP, D) 363,113  Shares  issuable  upon the exercise of warrants held
for the account of QIP, E) 96,830  Shares  issuable upon the exercise of Warrant
No. 11 held for the account of QIP, F) 58,098 Shares  issuable upon the exercise
of Warrant No. 13 held for the account of QIP, G) 96,830  Shares  issuable  upon
the  exercise of Warrant  No. 15 held for the account of QIP, H) 287,250  Shares
issuable  upon the  exercise  of Warrant  No. 17 held for the account of QIP, I)
172,995  Shares held for the  account of SFM  Domestic  Investments,  J) 124,701
Shares issuable upon the conversion of 14,590 shares of Series A Preferred Stock
held for the account of SFM Domestic  Investments,  K) 419,666  Shares  issuable
upon the conversion of 281,571  shares of Series B Preferred  Stock held for the
account of SFM Domestic Investments, L) 11,887 Shares issuable upon the exercise
of warrants  held for the account of SFM Domestic  Investments,  M) 3,170 Shares
issuable  upon the  exercise  of the  Warrant No. 12 held for the account of SFM
Domestic Investments,  N) 1,902 Shares issuable upon the exercise of Warrant No.
14 held for the account of SFM Domestic  Investments,  O) 3,170 Shares  issuable
upon the  exercise of the  Warrant  No. 16 held for the account of SFM  Domestic
Investments,  and P) 9,394 Shares  issuable  upon the exercise of Warrant No. 18
held for the account of SFM Domestic Investments.

     (b) (i) Each of QIP,  QIHMI,  QIH  Management and SFM LLC (by virtue of the
QIP  contract)  may be deemed to have the sole  power to direct  the  voting and
disposition of the  22,825,650  Shares held for the account of QIP (assuming the
conversion of all the Series A
<PAGE>
                                                             Page 10 of 36 Pages


Preferred Stock and the Series B Preferred  Stock,  and the exercise of the
warrants and Warrant No. 11,  Warrant No. 13,  Warrant No. 15 and Warrant No. 17
held for the account of QIP).

          (ii) SFM Domestic  Investments may be deemed to have the sole power to
direct the voting and  disposition  of the  746,885  Shares held for its account
(assuming the  conversion  of all the Series A Preferred  Stock and the Series B
Preferred  Stock,  and the exercise of the warrants and Warrant No. 12,  Warrant
No. 14, Warrant No. 16 and Warrant No. 18 held for its account).

          (iii) Mr. Soros (as a result of his  position  with SFM LLC and in his
capacity as the sole managing member of SFM Domestic  Investments) may be deemed
to have the sole power to direct the voting and disposition of 23,572,535 Shares
held for the accounts of QIP and SFM Domestic Investments.  This number consists
of A) 22,825,650  Shares held for the account of QIP (assuming the conversion of
all the Series A  Preferred  Stock and the  Series B  Preferred  Stock,  and the
exercise of the warrants and Warrant No. 11,  Warrant No. 13, Warrant No. 15 and
Warrant No. 17 held for the  account of QIP) and B) 746,885  Shares held for the
account of SFM Domestic Investments (assuming the conversion of all the Series A
Preferred  Stock and the  Series B  Preferred  Stock,  and the  exercise  of the
warrants and Warrant No. 12,  Warrant No. 14,  Warrant No. 16 and Warrant No. 18
held for the account of SFM Domestic Investments).

     (c)  Except  for the  transactions  described  in Item 6 below,  which were
effected in a privately negotiated transaction,  there have been no transactions
effected  with  respect to the Shares  since June 21, 2002 (60 days prior to the
date hereof) by any of the Reporting Persons.

     (d) (i) The shareholders of QIP,  including  Quantum  Industrial  Holdings,
Ltd., a British Virgin Islands international business company, have the right to
participate in the receipt of dividends from, or proceeds from the sales of, the
securities  held for the  account  of QIP in  accordance  with  their  ownership
interests in QIP.

          (ii)  Certain  members of SFM Domestic  Investments  have the right to
participate in the receipt of dividends  from, or proceeds from the sale of, the
securities held for the account of SFM Domestic Investments.

     (e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
        Securities of the Issuer.

     On August 9, 2002, the Issuer  entered into a Series 2002  Preferred  Stock
Purchase  Agreement  (the  "Purchase  Agreement")  with  QIP  and  SFM  Domestic
Investments.  Pursuant to the terms of the  Purchase  Agreement,  QIP  purchased
2,033.43 shares of the Series 2002  Convertible  Preferred Stock, par value $.01
per share  ("Series 2002  Preferred  Stock") for an aggregate  purchase price of
$2,033,430,  and SFM Domestic  Investments  purchased 66.57 shares of the Series
2002 Preferred Stock for an aggregate purchase price of $66,570.  So long as any
shares  of the  Series  2002  Preferred  Stock are  owned by QIP,  SFM  Domestic
Investments or their  respective  affiliates,  the Issuer has agreed not to take
any  action to  approve  or  otherwise  facilitate  certain  change  of  control
transactions,  including,  but not limited to, a merger or  consolidation of the
Issuer  resulting  in a change of  control  or a sale of  substantially  all the
assets of the  Issuer,  unless  provision  has been made for the  holders of the
Series 2002 Preferred  Stock to receive in connection  with such  transaction an
amount in cash equal to $1,000 per share of the Series 2002 Preferred Stock. The
foregoing  description of the Purchase Agreement does not purport to be complete
and is qualified in its entirety by the terms of the Purchase  Agreement,  which
is attached in Exhibit EEE and is  incorporated  herein by reference in response
to this Item 6.

<PAGE>
                                                             Page 11 of 36 Pages


     Pursuant  to  the  terms  of  the  Certificate  of  Powers,   Designations,
Preferences  and  Rights of the Series  2002  Convertible  Preferred  Stock (the
"Series 2002 Preferred  Certificate of Designations")  and pursuant to the terms
of the  Certificate  of  Correction  of  Certificate  of  Powers,  Designations,
Preferences and Rights of Series 2002  Convertible  Preferred Stock (the "Series
2002  Preferred  Certificate  of  Correction"),  filed  by the  Issuer  with the
Delaware  Secretary  of the  State on  August  9,  2002  and  August  19,  2002,
respectively,  the shares of the Series 2002 Preferred Stock are convertible (to
the  extent  stockholder  approval  is not  required  by the rules of the Nasdaq
SmallCap Market or any other national  securities  exchange or quotation  system
upon which the Common  Stock may be listed from time to time),  at the option of
the holders thereof,  into any equity  securities sold by the Issuer for cash in
any  subsequent  round of financing at a conversion  price based upon the lowest
price per share paid by any investor in such subsequent round of financing.  The
holders of the Series 2002  Preferred  Stock are entitled to a  preference  on a
liquidation,  dissolution  or winding up of the Issuer equal to $1,000 per share
of the Series  2002  Preferred  Stock.  So long as any shares of the Series 2002
Preferred  Stock are  outstanding,  the approval of the holders of a majority of
the shares of the Series 2002  Preferred  Stock,  voting  separately as a class,
must be  obtained  to  designate  or issue any  shares of  capital  stock of the
Issuer, or any rights,  warrants or options exchangeable for or convertible into
capital  stock of the  Issuer,  ranking  pari passu with or senior to the Series
2002 Preferred Stock in the event of a liquidation, dissolution or winding up of
the Issuer. The foregoing  descriptions of the Series 2002 Preferred Certificate
of  Designations  and Series 2002  Preferred  Certificate  of  Correction do not
purport to be complete and are  qualified in their  entirety by the terms of the
Series 2002  Preferred  Certificate  of  Designations  and Series 2002 Preferred
Certificate  of  Correction,  which are attached in Exhibit FFF and Exhibit GGG,
respectively,  and are incorporated herein by reference in response to this Item
6.

     Pursuant to the terms of a letter (the  "Letter"),  dated  August 19, 2002,
from the Company to QIP and SFM Domestic Investments,  the Company has agreed to
put forth a proposal seeking  stockholder  approval of the conversion  rights of
the Series 2002 Preferred  Stock at the Company's next annual or special meeting
of  stockholders  to the extent that  stockholder  approval  of such  conversion
rights is  required  by the  rules of the  Nasdaq  SmallCap  Market or any other
national securities exchange or quotation system upon which the Common Stock may
be listed from time to time.  The foregoing  description  of the Letter does not
purport to be  complete  and is  qualified  in its  entirety by the terms of the
Letter, which is attached in Exhibit HHH and is incorporated herein by reference
in response to this Item 6.

     In connection  with its purchase of $2,100,000 of shares of the Series 2002
Preferred  Stock,  QIP  and  SFM  Domestic  Investments  reduced  their  standby
commitment under the Standby Commitment (a copy of which was previously filed as
Exhibit  YY to  Schedule  13D  Amendment  No. 11 and is  incorporated  herein by
reference in response to this Item 6) to zero.  In  connection  with the Standby
Commitment,  QIP and SFM  Domestic  Investments  have  agreed with the Issuer to
waive the anti-dilution  provisions  contained in Section 5.8.6. of the Issuer's
Certificate of Incorporation (a copy of which was previously filed as Exhibit RR
to Schedule  13D  Amendment  No. 8 and is  incorporated  herein by  reference in
response  to  this  Item 6)  with  respect  to the  issuance  of any  additional
securities  of the Issuer  into which the  shares of the Series  2002  Preferred
Stock are  converted,  but only if there are no purchasers of securities in such
financing  other  than QIP and SFM  Domestic  Investments  or  their  respective
affiliates and only if none of QIP, SFM Domestic Investments or their respective
affiliates  invest  any  additional  funds  in  such  financing.  The  foregoing
descriptions of the Standby  Commitment and the Certificate of  Incorporation do
not purport to be complete and are  qualified in their  entirety by the terms of
the Standby Commitment and the Certificate of Incorporation, respectively.

     Except as set forth herein, the Reporting Persons do no have any contracts,
arrangements,  understandings or relationships with respect to any securities of
the Issuer.

Item 7. Material to be Filed as Exhibits

     The Exhibit Index is incorporated herein by reference.

<PAGE>

                                                             Page 12 of 36 Pages


                                   SIGNATURES

     After  reasonable  inquiry and to the best of my knowledge and belief,
the  undersigned  certifies that the  information set forth in this Statement is
true, complete and correct.


Date: August 20, 2002                   QUANTUM INDUSTRIAL PARTNERS LDC

                                        By:      /s/  Richard D. Holahan, Jr.
                                                -----------------------------
                                                 Richard D. Holahan, Jr.
                                                 Attorney-in-Fact

                                        QIH MANAGEMENT INVESTOR, L.P.

                                        By:      QIH Management, Inc.,
                                                 its General Partner

                                        By:      /s/  Richard D. Holahan, Jr.
                                                -----------------------------
                                                 Richard D. Holahan, Jr.
                                                 Vice President

                                        QIH MANAGEMENT, INC.

                                        By:      /s/  Richard D. Holahan, Jr.
                                                -----------------------------
                                                 Richard D. Holahan, Jr.
                                                 Vice President

                                        SOROS FUND MANAGEMENT LLC

                                        By:      /s/  Richard D. Holahan, Jr.
                                                -----------------------------
                                                 Richard D. Holahan, Jr.
                                                 Assistant General Counsel

                                        SFM DOMESTIC INVESTMENTS LLC

                                        By:      George Soros
                                                 Its Managing Member

                                        By:      /s/  Richard D. Holahan, Jr.
                                                ----------------------------
                                                 Richard D. Holahan, Jr.
                                                 Attorney-in-Fact

                                        GEORGE SOROS

                                        By:      /s/  Richard D. Holahan, Jr.
                                                -----------------------------
                                                 Richard D. Holahan, Jr.
                                                 Attorney-in-Fact
<PAGE>
                                                             Page 13 of 36 Pages


                                  EXHIBIT INDEX


EEE.      Form of the Series 2002 Preferred Stock Purchase  Agreement,        14
          dated as of August 9, 2002, between Bluefly,  Inc. and the
          investors listed on Schedule 1 thereto.

FFF.      Form of the  Certificate  of  Powers,  Designations,                29
          Preferences  and Rights of Series 2002 Convertible
          Preferred Stock of Bluefly, Inc.

GGG.      Form  of the  Certificate  of  Correction  of the                   35
          Certificate  of  Powers, Designations,  Preferences
          and  Rights  of  the  Series  2002  Convertible
          Preferred Stock of Bluefly, Inc.

HHH.      Form of letter, dated as of August 19, 2002, between                36
          Bluefly, Inc. and Quantum Industrial Partners LDC.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>bluefly13d_exheee.txt
<DESCRIPTION>PREFERRED STOCK PURCHASE AGREEMENT
<TEXT>
                                                             Page 14 of 36 Pages


                                                                     EXHIBIT EEE




                 SERIES 2002 PREFERRED STOCK PURCHASE AGREEMENT
                 ----------------------------------------------


     THIS SERIES 2002 PREFERRED STOCK PURCHASE AGREEMENT, dated as of August __,
2002 (this  "Agreement"),  is  entered  into by and  between  BLUEFLY,  INC.,  a
Delaware  corporation  (the  "Company"),  and the investors listed on Schedule 1
hereto (each, an "Investor" and, collectively, the "Investors").

                                    RECITALS
                                    --------

     WHEREAS, the Investors desire to purchase from the Company, and the Company
desires to issue and sell to the  Investors,  Two Thousand  One Hundred  (2,100)
shares (the "Shares") of Series 2002 Convertible Preferred Stock, par value $.01
per share (the "Series 2002 Preferred Stock"),  of the Company on the terms, and
subject to the conditions, contained herein.

                                    AGREEMENT
                                    ---------

     NOW, THEREFORE, in consideration for the mutual covenants contained herein,
and for other good and valuable  consideration,  the receipt and  sufficiency of
which are hereby  acknowledged,  the  parties  hereto,  intending  to be legally
bound, agree as follows:

                                   ARTICLE I
                PURCHASE AND SALE OF SERIES 2002 PREFERRED STOCK
                ------------------------------------------------

     Subject to the terms and conditions  hereof,  the Company hereby issues and
sells to the Investors, and each Investor hereby purchases from the Company, the
number of Shares set for  opposite  such  Investor's  name in  Schedule 1, for a
purchase  price of One  Thousand  Dollars  ($1,000)  per share,  resulting in an
aggregate purchase price for all Shares sold pursuant to the terms hereof of Two
Million One Hundred Thousand Dollars ($2,100,000).

                                   ARTICLE II
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY
                  ---------------------------------------------

     The Company represents and warrants to the Investors as follows:

     SECTION 2.1  Organization,  etc. The Company and its Subsidiary (as defined
in Section 2.4(b)) have each been duly formed,  and are each validly existing as
a corporation  in good  standing  under the laws of their  respective  States of
incorporation, and are each qualified to do business as a foreign corporation in
each  jurisdiction in which the failure to be so qualified  could  reasonably be
expected to have a material adverse effect on the assets, liabilities, condition
(financial  or other),  business or results of operations of the Company and its
Subsidiary taken as
<PAGE>
                                                             Page 15 of 36 Pages


a whole (a "Material Adverse Effect").  The Company and its Subsidiary each have
have the requisite corporate power and authority to own, lease and operate their
respective  properties and to conduct their  respective  businesses as presently
conducted.  The Company has the requisite corporate power and authority to enter
into, execute,  deliver and perform all of its duties and obligations under this
Agreement and to consummate the transactions contemplated hereby.

     SECTION 2.2 Authorization.  The execution, delivery and performance of this
Agreement  and the  issuance  of the  Shares  have been duly  authorized  by all
necessary  corporate  action  on the  part of the  Company,  including,  without
limitation,  the due authorization by the affirmative votes of a majority of the
disinterested directors of the Company's Board of Directors.

     SECTION 2.3 Validity; Enforceability. This Agreement has been duly executed
and  delivered  by the Company,  and  constitutes  the legal,  valid and binding
obligation of the Company,  enforceable  against the Company in accordance  with
its terms,  except as such  enforceability may be limited by, or subject to, any
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and subject to general  principles of
equity.

     SECTION 2.4 Capitalization.

          (a) As of the date hereof, the authorized capital stock of the Company
consists of 40,000,000  shares of common  stock,  $0.01 par value per share (the
"Common Stock"),  and 25,000,000 shares of preferred stock,  $0.01 par value per
share,  of which  500,000  shares  have  been  designated  Series A  Convertible
Preferred  Stock,  9,000,000  shares have been  designated  Series B Convertible
Preferred  Stock and 2,000  shares have been  designated  Series 2002  Preferred
Stock. Without giving effect to the transactions contemplated by this Agreement,
the  issued  and  outstanding  capital  stock  of the  Company  consists  of (i)
10,391,904  shares of Common Stock,  (ii) 500,000 shares of Series A Convertible
Preferred  Stock and (iii)  8,910,782  shares of Series B Convertible  Preferred
Stock.  All such shares of the Company have been duly  authorized  and are fully
paid and  non-assessable.  Except  as set  forth on  Schedule  2.4  hereto or as
otherwise  contemplated  by this  Agreement,  there are no outstanding  options,
warrants or other equity  securities that are  convertible  into, or exercisable
for, shares of the Company's capital stock.

          (b) The only Subsidiary of the Company is Clothesline Corporation. The
Company owns all of the issued and outstanding  capital stock of its Subsidiary,
free and clear of all  liens and  encumbrances.  All of such  shares of  capital
stock are duly authorized,  validly issued,  fully paid and non-assessable,  and
were issued in compliance with the registration and  qualification  requirements
of all  applicable  federal,  state and foreign  securities  laws.  There are no
options,  warrants,  conversion  privileges,  subscription or purchase rights or
other  rights  presently  outstanding  to  purchase  or  otherwise  acquire  any
authorized  but unissued,  unauthorized  or treasury  shares of capital stock or
other securities of, or any proprietary  interest in, the Company's  Subsidiary,
and  there  is  no  outstanding   security  of  any  kind  convertible  into  or
<PAGE>
                                                             Page 16 of 36 Pages


exchangeable for such shares or proprietary  interest.  "Subsidiary" means, with
respect to the Company,  a  corporation  or other entity of which 50% or more of
the voting power of the outstanding  voting equity  securities or 50% or more of
the outstanding economic equity interest is held, directly or indirectly, by the
Company.

     SECTION  2.5  Governmental  Consents.  The  execution  and  delivery by the
Company  of  this  Agreement,   and  the  performance  by  the  Company  of  the
transactions  contemplated  hereby,  do not and will not  require the Company to
effectuate or obtain any registration with, consent or approval of, or notice to
any federal,  state or other  governmental  authority or regulatory  body, other
than periodic and other filings  under the  Securities  Exchange Act of 1934, as
amended (the "Exchange Act"). The parties hereto agree and acknowledge  that, in
making the  representations  and  warranties in the  foregoing  sentence of this
Section 2.5, the Company is relying on the  representations  and warranties made
by the Investors in Section 3.4.

     SECTION 2.6 No Violation.  The execution and delivery of this Agreement and
the performance by the Company of the transactions  contemplated hereby will not
(i)  conflict  with or result in a breach of any  provision  of the  articles of
incorporation or by-laws of the Company,  (ii) result in a default or breach of,
or, except for the approval of the holders of the Company's Series A Convertible
Preferred Stock and Series B Convertible  Preferred Stock,  require any consent,
approval,  authorization or permit of, or filing or notification to, any person,
company or entity under any of the terms,  conditions or provisions of any note,
bond, mortgage,  indenture,  loan, factoring  arrangement,  license,  agreement,
lease or other  instrument or obligation to which the Company or its  Subsidiary
is a party or by which the Company or its Subsidiary or any of their  respective
assets may be bound or (iii) violate any law, judgment, order, writ, injunction,
decree, statute, rule or regulation of any court, administrative agency, bureau,
board, commission,  office,  authority,  department or other governmental entity
applicable to the Company or its Subsidiary,  except, in the case of clause (ii)
or (iii) above,  any such event that could not  reasonably be expected to have a
Material  Adverse  Effect or  materially  impair the  transactions  contemplated
hereby.

     SECTION 2.7 Issuances of Securities.  The Shares have been validly  issued,
and, upon payment therefor, will be fully paid and non-assessable. The offering,
issuance,  sale and delivery of the Shares as contemplated by this Agreement are
exempt  from  the  registration  and  prospectus  delivery  requirements  of the
Securities  Act of 1933, as amended (the  "Securities  Act"),  are being made in
compliance  with  all  applicable  federal  and  (except  for any  violation  or
non-compliance  that could not reasonably be expected to have a Material Adverse
Effect) state laws and  regulations  concerning the offer,  issuance and sale of
securities,  and are not being issued in violation  of any  preemptive  or other
rights  of  any  stockholder  of the  Company.  The  parties  hereto  agree  and
acknowledge that, in making the  representations and warranties in the foregoing
sentence of this Section 2.7, the Company is relying on the  representations and
warranties made by the Investors in Section 3.4.

     SECTION 2.8 Absence of Certain Developments. Since December 31, 2001, there
has not been any: (i) material  adverse  change in the  condition,  financial or
otherwise,  of the
<PAGE>
                                                             Page 17 of 36 Pages


Company and its  Subsidiary  (taken as a whole) or in the  assets,  liabilities,
properties  or business of the  Company and its  Subsidiary  (taken as a whole);
(ii) declaration, setting aside or payment of any dividend or other distribution
with respect to, or any direct or indirect  redemption  or  acquisition  of, any
capital stock of the Company;  (iii) waiver of any valuable right of the Company
or its  Subsidiary  or  cancellation  of any material  debt or claim held by the
Company or its  Subsidiary;  (iv) material  loss,  destruction  or damage to any
property  of the  Company  or  its  Subsidiary,  whether  or  not  insured;  (v)
acquisition  or  disposition  of  any  material   assets  (or  any  contract  or
arrangement  therefor) or any other  material  transaction by the Company or its
Subsidiary  otherwise  than for fair value in the  ordinary  course of  business
consistent with past practice; or (vi) other agreement or understanding, whether
in writing or otherwise, for the Company or its Subsidiary to take any action of
the type, or any action that would result in an event of the type,  specified in
clauses (i) through (v).

     SECTION 2.9 Commission Filings.

(a) The Company has filed all required  forms,  reports and other documents with
the Securities and Exchange  Commission (the  "Commission") for periods from and
after January 1, 2001 (collectively,  the "Commission  Filings"),  each of which
has complied in all material  respects with all applicable  requirements  of the
Securities  Act  and/or  the  Exchange  Act (as  applicable).  The  Company  has
heretofore  made  available  to the  Investors  all of the  Commission  Filings,
including the Company's  Annual Report on Form 10-K for the year ended  December
31,  2001 and the  Company's  Quarterly  Report on Form  10-Q for the  quarterly
period  ended March 31,  2002.  As of their  respective  dates,  the  Commission
Filings did not contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements  made, in light of the
circumstances   under  which  they  were  made,  not  misleading.   The  audited
consolidated  financial statements and unaudited interim consolidated  financial
statements  of the  Company  included  or  incorporated  by  reference  in  such
Commission  Filings have been prepared in  accordance  with  generally  accepted
accounting principles, consistently applied ("GAAP") (except as may be indicated
in the notes thereto or, in the case of the unaudited  consolidated  statements,
as  permitted  by Form  10-Q),  complied  as of  their  respective  dates in all
material  respects with  applicable  accounting  requirements  and the published
rules and  regulations  of the  Commission  with  respect  thereto,  and  fairly
present,  in all material respects,  the consolidated  financial position of the
Company and its Subsidiary as of the dates thereof and the results of operations
for the periods then ended (subject,  in the case of any unaudited  consolidated
interim financial  statements,  to the absence of footnotes required by GAAP and
normal year-end adjustments).

(b) The Company shall file as promptly as  practicable  with the  Commission its
Quarterly  Report on Form 10-Q for the quarterly period ended June 30, 2002 (the
"June  2002  10-Q"),  substantially  in the  form  previously  presented  to the
Investors.  The June 2002 10-Q shall  comply in all material  respects  with all
applicable  requirements  of the  Securities  Act  and/or the  Exchange  Act (as
applicable).  As of its date of filing, the June 2002 10-Q shall not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
in order to make the statements made, in light of the circumstances  under which
they were made, not misleading.
<PAGE>
                                                             Page 18 of 36 Pages


The unaudited  consolidated interim financial statements of the Company included
or  incorporated  by reference in the June 2002 10-Q shall have been prepared in
accordance  with GAAP  (except as may be  indicated  in the notes  thereto or as
permitted  by Form  10-Q),  shall  comply  as of their  respective  dates in all
material  respects with  applicable  accounting  requirements  and the published
rules and regulations of the Commission with respect  thereto,  and shall fairly
present,  in all material respects,  the consolidated  financial position of the
Company and its Subsidiary as of the dates thereof and the results of operations
for the periods then ended (subject to the absence of footnotes required by GAAP
and normal year-end adjustments).

     SECTION  2.10  Brokers.  Neither  the  Company,  nor  any of its  officers,
directors  or  employees,  has  employed  any broker or finder,  or incurred any
liability for any brokerage fees, commissions, finder's or other similar fees or
expenses in connection with the transactions contemplated hereby.

                                  ARTICLE III
                 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

     Each  Investor  represents  and warrants to the Company,  severally but not
jointly, as follows:

     SECTION 3.1  Organization,  etc.  Such Investor has been duly formed and is
validly  existing and in good  standing  under the laws of its  jurisdiction  of
organization. Such Investor has the requisite organizational power and authority
to enter into,  execute,  deliver and perform all of its duties and  obligations
under this Agreement and to consummate the transactions contemplated hereby.

     SECTION 3.2  Authority.  The  execution,  delivery and  performance of this
Agreement  have been duly  authorized by all necessary  organizational  or other
action on the part of such Investor.

     SECTION 3.3 Validity; Enforceability. This Agreement has been duly executed
and delivered by such Investor,  and  constitutes  the legal,  valid and binding
obligation  of such  Investor,  enforceable  against such Investor in accordance
with its terms,  except as such enforceability may be limited by, or subject to,
any bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and subject to general principles
of equity.

     SECTION 3.4 Investment Representations.

          (a) Such Investor  acknowledges  that the offer and sale of the Shares
to such  Investor  have not been  registered  under the  Securities  Act, or the
securities  laws of any state or regulatory  body, are being offered and sold in
reliance upon  exemptions from the  registration  requirements of the Securities
Act and such laws and may not be transferred or resold without
<PAGE>
                                                             Page 19 of 36 Pages


registration under such laws unless an exemption is available. The certificates
representing  the Shares will be imprinted  with a legend in  substantially  the
following form:

          "THE OFFER AND SALE OF THE  SECURITIES  REPRESENTED  BY THIS
          CERTIFICATE  HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES
          ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
          AND SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED,  ASSIGNED,
          PLEDGED,  HYPOTHECATED,  OR  OTHERWISE  DISPOSED  OF  EXCEPT
          PURSUANT TO A  REGISTRATION  STATEMENT  WITH RESPECT TO SUCH
          SECURITIES  WHICH IS EFFECTIVE  UNDER SUCH ACT AND UNDER ANY
          APPLICABLE STATE  SECURITIES LAWS UNLESS,  IN THE OPINION OF
          COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, AN EXEMPTION
          FROM THE  REGISTRATION  REQUIREMENTS  OF SUCH ACT AND  STATE
          SECURITIES LAWS IS AVAILABLE."

          (b) Such Investor is acquiring the Shares for investment, and not with
a view to the resale or distribution  thereof,  and is acquiring such securities
for its own account.

          (c) Such Investor is an "accredited investor" (as that term is defined
in  Rule  501  of  Regulation  D  promulgated  under  the  Securities  Act),  is
sophisticated  in  financial  matters and is familiar  with the  business of the
Company  so that it is  capable  of  evaluating  the  merits  and  risks  of its
investment  in the  Company and has the  capacity to protect its own  interests.
Such Investor has had the  opportunity  to  investigate on its own the Company's
business, management and financial affairs and has had the opportunity to review
the Company's operations and facilities and to ask questions and obtain whatever
other information concerning the Company as such Investor has deemed relevant in
making its investment decision.

          (d) Such Investor is in compliance with the Uniting and  Strengthening
America by  Providing  Appropriate  Tools  Required to  Intercept  and  Obstruct
Terrorism Act of 2001.  Neither such Investor,  nor any of its principal owners,
partners,  members,  directors  or officers  is  included  on: (i) the Office of
Foreign Assets Control list of foreign  nations,  organizations  and individuals
subject  to  economic  and trade  sanctions,  based on U.S.  foreign  policy and
national security goals; (ii) Executive Order 13224,  which sets forth a list of
individuals and groups with whom U.S. persons are prohibited from doing business
because such persons have been  identified  as terrorists or persons who support
terrorism  or (iii) any other watch list issued by any  governmental  authority,
including the Commission.

          (e) No  representations  or warranties have been made to such Investor
by the Company or any  director,  officer,  employee,  agent or affiliate of the
Company,  other than the representations and warranties of the Company set forth
herein, and the decision of such Investor to purchase the Shares is based on the
information  contained  herein,  the Commission  Filings and such Investor's own
independent investigation of the Company.
<PAGE>
                                                             Page 20 of 36 Pages


     SECTION 3.5  Governmental  Consents.  The  execution  and  delivery by such
Investor  of  this  Agreement,  and the  performance  by  such  Investor  of the
transactions  contemplated  hereby, do not and will not require such Investor to
effectuate or obtain any registration with, consent or approval of, or notice to
any federal state or other governmental authority or regulatory body, except for
the filing with the Commission of an amendment to such  Investor's  Schedule 13D
under the Exchange Act with respect to its acquisition of the Shares.

     SECTION 3.6 No Violation.  The execution and delivery of this Agreement and
the performance by such Investor of the transactions  contemplated  hereby, will
not (i) conflict  with or result in a breach of any provision of the articles of
incorporation,  by-laws or similar organizational  documents of such Investor or
(ii) violate any law, judgment,  order, writ, injunction,  decree, statute, rule
or regulation of any court,  administrative agency,  bureau, board,  commission,
office,  authority,  department or other governmental  entity applicable to such
Investor,  except,  in the case of clause (ii) above,  any such  violation  that
could  not  reasonably  be  expected  to  materially   impair  the  transactions
contemplated hereby.

     SECTION  3.7  Brokers.  Neither  such  Investor,  nor any of its  officers,
directors  or  employees,  has  employed  any broker or finder,  or incurred any
liability for any brokerage fees, commissions, finder's or other similar fees or
expenses in connection with the transactions contemplated hereby.

                                   ARTICLE IV
                            SURVIVAL; INDEMNIFICATION

     SECTION 4.1  Survival.  The  representations  and  warranties  contained in
Articles II and III hereof shall survive until the first anniversary of the date
hereof.

     SECTION 4.2 Indemnification. Each party (including its officers, directors,
employees,  affiliates,  agents,  successors  and assigns (each an  "Indemnified
Party"))  shall be  indemnified  and held harmless by the other  parties  hereto
(each an  "Indemnifying  Party") for any and all liabilities,  losses,  damages,
claims,  costs  and  expenses,   interest,   awards,   judgments  and  penalties
(including,  without  limitation,   reasonable  attorneys'  fees  and  expenses)
actually suffered or incurred by them (collectively,  "Losses"),  arising out of
or  resulting  from the  breach of any  representation  or  warranty  made by an
Indemnifying Party contained in this Agreement.  Notwithstanding  the foregoing,
the aggregate  liability of any Investor under this Article IV shall in no event
exceed fifty percent  (50%) of the purchase  price paid by such Investor for the
Shares  purchased by it and the  aggregate  liability of the Company  under this
Article IV shall in no event exceed fifty  percent  (50%) of the purchase  price
paid by the Investors for the Shares,  except that the Company's liability for a
violation of any of the  representations  and warranties  contained in the first
two sentences of Section 2.7 may exceed such  limitation,  but shall in no event
exceed one hundred  percent  (100%) of the purchase  price paid by the Investors
for the Shares.

     SECTION 4.3 Indemnification  Procedure.  The obligations and liabilities of
the Indemnifying Party under this Article IV with respect to Losses arising from
claims of any third
<PAGE>
                                                             Page 21 of 36 Pages


party that are subject to the  indemnification  provided for in this Article IV
("Third Party Claims")  shall be governed by and  contingent  upon the following
additional terms and conditions: if an Indemnified Party shall receive notice of
any Third Party Claim, the Indemnified  Party shall give the Indemnifying  Party
notice of such Third Party Claim promptly  after the receipt by the  Indemnified
Party of such notice  (which  notice  shall  include the amount of the Loss,  if
known,  and method of  computation  thereof,  and  containing a reference to the
provisions of this  Agreement in respect of which such right of  indemnification
is claimed or  arises);  provided,  however,  that the  failure to provide  such
notice  shall not release  the  Indemnifying  Party from any of its  obligations
under this Article IV except to the extent the Indemnifying  Party is materially
prejudiced by such failure and shall not relieve the Indemnifying Party from any
other  obligation  or  liability  that  it may  have  to any  Indemnified  Party
otherwise  than under this  Article IV. Upon written  notice to the  Indemnified
Party within five (5) days of the receipt of such notice, the Indemnifying Party
shall be entitled to assume and control the defense of such Third Party Claim at
its or his expense and through counsel of its or his choice (which counsel shall
be reasonably satisfactory to the Indemnified Party);  provided,  however, that,
if there  exists or is  reasonably  likely to exist a conflict of interest  that
would  make it  inappropriate  in the  reasonable  judgment  of  counsel  to the
Indemnified  Party for the same counsel to represent both the Indemnified  Party
and the  Indemnifying  Party,  then the  Indemnified  Party shall be entitled to
retain its or his own  counsel in each  jurisdiction  for which the  Indemnified
Party  reasonably  determines  counsel  is  required,  at  the  expense  of  the
Indemnifying  Party. In the event the Indemnifying  Party exercises the right to
undertake any such defense against any such Third Party Claim as provided above,
the  Indemnified  Party  shall  cooperate  with the  Indemnifying  Party in such
defense and make  available  to such  Indemnifying  Party,  at the  Indemnifying
Party's expense, all witnesses,  pertinent records, materials and information in
the  Indemnified  Party's  possession or under the  Indemnified  Party's control
relating thereto as is reasonably required by the Indemnifying Party. Similarly,
in the event the Indemnified  Party is,  directly or indirectly,  conducting the
defense  against  any such Third  Party  Claim,  the  Indemnifying  Party  shall
cooperate with the  Indemnified  Party in such defense and make available to the
Indemnified  Party,  at the  Indemnifying  Party's  expense,  all such witnesses
(including  himself),  records,  materials and  information in the  Indemnifying
Party's possession or under the Indemnifying Party's control relating thereto as
is reasonably  required by the Indemnified  Party. No such Third Party Claim may
be settled by the Indemnifying  Party on behalf of the Indemnified Party without
the prior written consent of the  Indemnified  Party (which consent shall not be
unreasonably  withheld);  provided,  however,  in the event that the Indemnified
Party does not consent to any such  settlement that would provide it with a full
release from  indemnified Loss and would not require it to take, or refrain from
taking, any action, the Indemnifying Party's liability for indemnification shall
not exceed the amount of such proposed  settlement.  The Indemnified  Party will
refrain from any act or omission that is inconsistent with the position taken by
the  Indemnifying  Party  in the  defense  of a Third  Party  Claim  unless  the
Indemnified  Party determines that such act or omission is reasonably  necessary
to protect its own interest.
<PAGE>
                                                             Page 22 of 36 Pages


                                   ARTICLE V
                                  MISCELLANEOUS

     SECTION 5.1 Change of Control  Provision.  For so long as any of the Shares
are owned by the Investors or their  affiliates,  the Company will not agree to,
or  take  any  action  to  approve  or  otherwise   facilitate  any,  merger  or
consolidation or Change of Control (including  granting approvals required under
applicable  anti-takeover  statutes),  unless  provision  has been  made for the
holders of the Shares to receive from the acquiror or any other person or entity
(other than the Company) as a result of and in connection  with the  transaction
an amount in cash equal to the aggregate  liquidation  preference for the Shares
held  by  them,  as  set  forth  in the  Certificate  of  Powers,  Designations,
Preferences  and Rights of the Series 2002 Preferred  Stock.  The parties hereto
agree that  irreparable  damage would occur in the event that the  provisions of
this  Section  5.1 were not  performed  in  accordance  with their terms and the
Investors shall be entitled to specific performance of the terms of this Section
5.1 in addition to any other remedies at law or in equity.  For purposes of this
Section  5.1: a "Change of  Control"  shall  mean any of the  following  (i) any
person or "group"  (within the meaning of Section  13(d)(3) of the Exchange Act)
becoming the beneficial owner, directly or indirectly,  of outstanding shares of
Capital Stock of the Company entitling such Person or Persons to exercise 50% or
more of the total votes entitled to be cast at a regular or special meeting,  or
by action by written consent, of the shareholders of the Company in the election
of directors (the term "beneficial owner" shall be determined in accordance with
Rule 13d-3 of the  Exchange  Act),  (ii) a majority of the Board of Directors of
the Company shall consist of Persons other than  Continuing  Directors,  (iii) a
recapitalization,  reorganization, merger, consolidation or similar transaction,
in each case with respect to which all or substantially  all the Persons who are
the respective  beneficial  owners,  directly or indirectly,  of the outstanding
shares   of   Capital   Stock  of  the   Company   immediately   prior  to  such
recapitalization,  reorganization, merger, consolidation or similar transaction,
will own less  than 50% of the  combined  voting  power of the then  outstanding
shares of Capital  Stock of the Company  resulting  from such  recapitalization,
reorganization,  merger, consolidation or similar transaction,  (iv) the sale or
other  disposition of all or substantially  all the assets of the Company in one
transaction or in a series of related  transactions,  (v) any transaction occurs
(other  than one  described  in (iv) or (v))),  the  result of which is that the
Common Stock is not required to be  registered  under Section 12 of the Exchange
Act and in which the  holders  of Common  Stock of the  Company  do not  receive
common stock of the Person  surviving such  transaction  which is required to be
registered under Section 12 of the Exchange Act, or (vi)  immediately  after any
merger,  consolidation,  recapitalization  or  similar  transaction,  a  "group"
(within the meaning of Section 13(d)(3) of the Exchange Act), other than a group
that includes the Investors  and/or their  affiliates,  shall be the  beneficial
owners,  directly or indirectly,  of outstanding  shares of Capital Stock of the
Company (or any Person surviving such  transaction)  entitling them collectively
to exercise 50% or more of the total voting power of shares of Capital  Stock of
the Company (or the surviving Person in such transaction) and in connection with
or as a result of such transaction, the Company (or such surviving Person) shall
have incurred or issued additional indebtedness such that the total indebtedness
so incurred or issued equals at least 50% of the  consideration  payable in such
transaction; "Capital Stock" shall mean, with
<PAGE>
                                                             Page 23 of 36 Pages


respect to the Company, any and all shares, interests,  participations,  rights
in, or other equivalents  (however  designated and whether voting or non-voting)
of, the Company's  capital stock; and "Person" shall mean any individual,  firm,
corporation,  partnership,  limited liability  company,  trust,  incorporated or
unincorporated  association,  joint venture,  joint stock company,  governmental
authority  or other  entity of any kind,  and shall  include any  successor  (by
merger or otherwise) of such entity;  and "Continuing  Directors" shall mean any
member of the Board of  Directors on the date hereof and any other member of the
Board of Directors  who shall be  recommended  or elected to succeed or become a
Continuing  Director  by a majority  of the  Continuing  Directors  who are then
members of the Board of Directors.

     SECTION 5.2  Publicity.  Except as may be required by applicable law or the
rules of any  securities  exchange or market on which  securities of the Company
are traded,  no party hereto shall issue a press release or public  announcement
or otherwise make any disclosure  concerning this Agreement and the transactions
contemplated hereby,  without prior approval of the others;  provided,  however,
that nothing in this  Agreement  shall restrict the Company or any Investor from
disclosing such information (a) that is already publicly available, (b) that may
be required or appropriate in response to any summons or subpoena (provided that
the  disclosing  party will use  commercially  reasonable  efforts to notify the
other  parties  in  advance of such  disclosure  under this  clause (b) so as to
permit  the  non-disclosing  parties  to seek a  protective  order or  otherwise
contest  such  disclosure,  and  the  disclosing  party  will  use  commercially
reasonable efforts to cooperate,  at the expense of the non-disclosing  parties,
in pursuing any such protective  order) or (c) in connection with any litigation
involving  disputes  as  to  the  parties'  respective  rights  and  obligations
hereunder.

     SECTION 5.3 Entire  Agreement.  This  Agreement and any other  agreement or
instrument to be delivered expressly pursuant to the terms hereof constitute the
entire  Agreement  between the parties hereto with respect to the subject matter
hereof and supersede all previous  negotiations,  commitments  and writings with
respect to such subject matter.

     SECTION 5.4  Assignments;  Parties in Interest.  Neither this Agreement nor
any of the rights,  interests or obligations hereunder may be assigned by any of
the parties hereto (whether by operation of law or otherwise)  without the prior
written  consent of the other parties.  This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing herein, express or
implied,  is intended to or shall  confer upon any person not a party hereto any
right,  benefit or remedy of any nature  whatsoever  under or by reason  hereof,
except as otherwise provided herein.

     SECTION  5.5  Amendments.  This  Agreement  may not be amended or  modified
except by an  instrument  in writing  signed  by, or on behalf  of, the  parties
against whom such amendment or modification is sought to be enforced.

     SECTION  5.6  Descriptive  Headings.   The  descriptive  headings  of  this
Agreement are inserted for convenience of reference only and do not constitute a
part of and shall not be utilized in interpreting this Agreement.
<PAGE>
                                                             Page 24 of 36 Pages


     SECTION 5.7 Notices and Addresses.  Any notice, demand, request, waiver, or
other communication under this Agreement shall be in writing and shall be deemed
to have been duly given on the date of service,  if personally served or sent by
facsimile;  on the business day after notice is delivered to a courier or mailed
by express  mail, if sent by courier  delivery  service or express mail for next
day  delivery;  and on the fifth  business day after  mailing,  if mailed to the
party to whom notice is to be given,  by first class  mail,  registered,  return
receipt requested, postage prepaid and addressed as follows:

To Company:                    Bluefly, Inc.
                               42 West 39th Street, 9th Floor
                               New York, New York 10018
                               Fax:     (212) 840-1903
                               Attn:    Jonathan B. Morris

                               With a copy to:

                               Swidler Berlin Shereff Friedman, LLP
                               405 Lexington Avenue
                               New York, New York 10174
                               Fax:     (212) 891-9598
                               Attn:    Richard A. Goldberg, Esq.


To the Investors:     To the address set forth on Schedule 1.

     SECTION 5.8 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent  jurisdiction to be illegal, void
or  unenforceable,  the remainder of this  Agreement will continue in full force
and  effect  and  the   application  of  such  provision  to  other  persons  or
circumstances  will be  interpreted so as reasonably to effect the intent of the
parties hereto.  The parties further agree to replace such void or unenforceable
provision of this  Agreement  with a valid and  enforceable  provision that will
achieve,  to the extent possible,  the economic,  business and other purposes of
such void or unenforceable provision.

     SECTION  5.9  Governing  Law.  This  Agreement  shall  be  governed  by and
construed in accordance with the internal laws of the State of New York, without
regard to conflicts of law  principles.  The parties  agree that the federal and
state courts  located in New York,  New York shall have  exclusive  jurisdiction
over any dispute  involving  this  Agreement  or the  transactions  contemplated
hereby,  and each party hereby  irrevocably  submits to the jurisdiction of, and
waives any objection to the laying of venue in, such courts.

     SECTION 5.10  Counterparts;  Facsimile  Signatures.  This  Agreement may be
executed in one or more  counterparts,  all of which shall be considered one and
the same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and
<PAGE>
                                                             Page 25 of 36 Pages


 delivered to the other parties,  it being  understood that all parties need not
sign the same  counterpart.  This Agreement may be executed by facsimile,  and a
facsimile  signature  shall  have the  same  force  and  effect  as an  original
signature on this Agreement.

     SECTION 5.11 Expenses.  The Company shall reimburse the Investors for their
reasonable  legal fees and expenses  incurred in connection with the negotiation
of this Agreement and the transactions  contemplated hereby.  Except as provided
above,  all  costs  and  expenses,   including,  without  limitation,  fees  and
disbursements of counsel, incurred in connection with the negotiation, execution
and delivery of this  Agreement and its related  documents  shall be paid by the
party  incurring such costs and expenses,  whether or not the closing shall have
occurred.
<PAGE>
                                                             Page 26 of 36 Pages


     IN WITNESS WHEREOF, this Agreement has been duly executed on the date first
set forth above.

                                      BLUEFLY, INC.

                                      By:      ___________________________
                                               Name:
                                               Title:

                                      QUANTUM INDUSTRIAL PARTNERS LDC



                                      By:      ___________________________
                                               Name:
                                               Title:

                                      SFM DOMESTIC INVESTMENTS LLC



                                      By:      ___________________________
                                               Name:
                                               Title:


<PAGE>
                                                             Page 27 of 36 Pages


                                   SCHEDULE 1

                         INVESTORS AND SHARE ALLOCATIONS
--------------------------------------------------------------------------------
                                                             Aggregate Purchase
Name and Address of Investor             Shares Purchased    Price
----------------------------             ----------------    ------
--------------------------------------------------------------------------------
Quantum Industrial Partners LDC          2,033.43            $2,033,430
Kaya Flamboyan 9
Villemstad
Curacao
Netherlands-Antilles

with a copy to:

Soros Fund Management LLC
888 Fifth Avenue
New York, New York 10106
Facsimile:  (212) 664-0544
Attn:  Richard Holahan, Esq.
--------------------------------------------------------------------------------
SFM Domestic Investments LLC                 66.57           $      66,570
c/o Soros Fund Management LLC
888 Fifth Avenue
New York, New York 10106
Facsimile:  (212) 664-0544
Attn:  Richard Holahan, Esq.
--------------------------------------------------------------------------------
                                  TOTAL  2,100               $2,100,000
--------------------------------------------------------------------------------


<PAGE>
                                                             Page 28 of 36 Pages


                                  SCHEDULE 2.4

                                 CAPITALIZATION
                                 --------------



     As of the date  hereof,  but  without  giving  effect  to the  transactions
contemplated by this Agreement,  the following equity securities are outstanding
and convertible into, or exercisable for shares of Common Stock:

     1.   500,000 shares of Series A Convertible  Preferred Stock (the "Series A
          Stock") are issued and outstanding.  The Series A Stock is convertible
          into 4,273,504 shares of Common Stock.

     2.   8,910,782 shares of Series B Convertible  Preferred Stock (the "Series
          B  Stock")  are  issued  and  outstanding.   The  Series  B  Stock  is
          convertible into 13,281,038 shares of Common Stock.

     3.   Warrants to purchase an aggregate of 1,069,144  shares of Common Stock
          are issued and outstanding.

     4.   Options issued to purchase 3,935,912 shares of Common Stock are issued
          and  outstanding  under the  Company's  1997  Stock  Option  Plan,  as
          amended, and 2000 Stock Option Plan, as amended.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>bluefly13d_exhfff.txt
<DESCRIPTION>CERTIFICATE OF DESIGNATION
<TEXT>
                                                             Page 29 of 36 Pages


                                                                     EXHIBIT FFF

                CERTIFICATE OF POWERS, DESIGNATIONS, PREFERENCES

                 AND RIGHTS OF SERIES 2002 CONVERTIBLE PREFERRED

                             STOCK OF BLUEFLY, INC.

          BLUEFLY, INC., a corporation organized and existing under the General

Corporation  Law of the State of Delaware (the  "Company"),  DOES HEREBY CERTIFY

THAT:

          Pursuant to  authority  conferred  upon the Board of  Directors of the
Company (the "Board") by the  Certificate of  Incorporation  of the Company (the
"Certificate  of  Incorporation"),  and pursuant to the provisions of ss. 151 of
the Delaware General Corporation Law (the "DGCL"),  the Board, at a meeting held
on August __, 2002,  duly adopted the  following  resolution  providing  for the
voting powers,  designations,  preferences and rights,  and the  qualifications,
limitations and restrictions, of the Series 2002 Convertible Preferred Stock.

          WHEREAS, the Certificate of Incorporation  provides for two classes of
shares known as common  stock,  $0.01 par value per share (the "Common  Stock"),
and preferred stock, $0.01 par value per share (the "Preferred Stock"); and

          WHEREAS,  the Board is authorized by the Certificate of  Incorporation
to provide  for the  issuance  of the shares of  Preferred  Stock in one or more
series, and by filing a certificate pursuant to the DGCL, to establish from time
to time the number of shares to be  included  in any such  series and to fix the
voting powers,  designations,  preferences  and rights of the shares of any such
series, and the qualifications, limitations and restrictions thereof.

          NOW, THEREFORE,  BE IT RESOLVED, that the Board deems it advisable to,
and hereby does,  designate a Series 2002 Convertible  Preferred Stock and fixes
and determines the voting powers, designations,  preferences and rights, and the
qualifications,  limitations  and  restrictions  relating  to  the  Series  2002
Convertible Preferred Stock as follows:

     1.  Designation.  There shall hereby be created and established a series of
Preferred  Stock,  and the shares of such  series of  Preferred  Stock  shall be
designated "Series 2002 Convertible  Preferred Stock" (referred to herein as the
"Series 2002 Stock").  Capitalized  terms used herein and not otherwise  defined
shall have the meanings set forth in Section 11 below.

     2. Authorized  Number.  The number of shares  constituting  the Series 2002
Stock shall be 2,100.
<PAGE>
                                                             Page 30 of 36 Pages


     3.  Ranking.  The  Series  2002  Stock  shall  rank,  as to  rights  upon a
liquidation,  dissolution  or  winding  up of the  Company,  on parity  with the
Company's currently  outstanding Series A Convertible Preferred Stock, $0.01 par
value per share (the "Series A Stock"), and the Company's currently  outstanding
Series B Convertible  Preferred Stock,  $0.01 par value per share (the "Series B
Stock"),  and senior and prior to the Common  Stock and to all other  classes or
series of stock issued by the Company,  currently  and in the future,  except as
otherwise  approved  by the  affirmative  vote or  consent  of the  holders of a
majority of the then-outstanding shares of Series 2002 Stock pursuant to Section
7 hereof.  All equity  securities  of the Company to which the Series 2002 Stock
ranks prior,  whether upon  liquidation,  dissolution,  winding up or otherwise,
including  the Common  Stock,  are  collectively  referred  to herein as "Junior
Securities."

     4.  Dividends.  Dividends shall be payable with respect to shares of Series
2002 Stock only if, and to the  extent,  declared  by the Board.  The holders of
shares of Series 2002 Stock shall not be entitled to receive any dividends  with
respect to such shares except in accordance with this Section 4.

     5.  Conversion.  Subject to the terms and conditions of this Section 5, the
holder of any share or shares of Series 2002 Stock shall have the right,  at its
option,  at any time  and  from  time to  time,  upon  the  consummation  of any
Subsequent  Round of Financing to convert each such share (or fraction  thereof)
of Series  2002 Stock into a number of fully paid and  nonassessable  Subsequent
Round Securities (with the most favorable terms received by any investor in such
Subsequent  Round of Financing)  equal to the quotient  obtained by dividing the
Series 2002  Liquidation  Preference  by the lowest price per  Subsequent  Round
Security paid by any investor in such  Subsequent  Round of  Financing.  Written
notice  of a  Subsequent  Round of  Financing  stating  the  date on which  such
Subsequent Round of Financing is expected to become effective and describing the
terms and conditions of such Subsequent Round of Financing shall be delivered by
the Company to, and  received by, the holders of shares of Series 2002 Stock not
less  than  10 days  prior  to the  consummation  of such  Subsequent  Round  of
Financing.  The  rights  of  conversion  pursuant  to this  Section  5 shall  be
exercised by the holder of shares of Series 2002 Stock by giving written notice,
which  shall be received by the Company not less than five (5) days prior to the
consummation  of such  Subsequent  Round of Financing  that the holder elects to
convert a stated  number of shares of Series  2002 Stock into  Subsequent  Round
Securities and by the surrender of a certificate or certificates  for the shares
to be so converted to the Company at its principal  office (or such other office
or agency of the Company as the Company  may  designate  by notice in writing to
the  holders of the Series  2002  Stock) at any time  during its usual  business
hours,  together  with a statement of the name or names (with  address) in which
the certificate or certificates for Subsequent Round Securities shall be issued.
Promptly after the surrender of the  certificate or  certificates  for shares of
Series 2002 Stock to be converted as set forth above,  and upon  consummation of
the Subsequent  Round of Financing  pursuant to which such shares of Series 2002
Stock are to be converted,  the Company shall issue and deliver,  or cause to be
issued or  delivered,  to the holders,  registered in such name or names as such
holders may direct,  a certificate  or  certificates  for the number and type of
Subsequent Round Securities issuable upon
<PAGE>
                                                             Page 31 of 36 Pages


conversion  of such shares of Series 2002 Stock.  To the extent that,  following
surrender of any certificate or certificates  for shares of Series 2002 Stock to
be converted as set forth above, the Company  determines not to proceed with the
Subsequent Round of Financing pursuant to which such shares of Series 2002 Stock
are to be converted,  such certificates shall be returned immediately  following
such  determination  to the holders  thereof and the shares of Series 2002 Stock
represented  by  such  certificates  shall  remain  outstanding.  No  fractional
Subsequent  Round  Securities  shall be issued upon  conversion of the shares of
Series 2002 Stock. If any fractional Subsequent Round Security would, except for
the provisions of the  immediately  preceding  sentence,  be delivered upon such
conversion,  the Company, in lieu of delivering such fractional Subsequent Round
Securities, shall pay to the holder surrendering the shares of Series 2002 Stock
for  conversion  an amount in cash  equal to the  current  market  price of such
fractional  Subsequent  Round Security as determined in good faith by the Board.
The issuance of certificates  for Subsequent Round Securities upon conversion of
the shares of Series  2002 Stock  shall be made  without  charge to the  holders
thereof for any issuance tax in respect thereof, provided that the Company shall
not be required  to pay any tax which may be payable in respect of any  transfer
involved in the issuance and  delivery of any  certificate  in a name other than
that of the holder of the shares of Series 2002 Stock which is being converted.

     6.  Liquidation  Rights.  Upon any  voluntary or  involuntary  liquidation,
dissolution or winding up of the Company  resulting in a distribution  of assets
to the holders of any class or series of the Company's  capital stock (each such
event, a "Series 2002 Liquidation"),  each holder of shares of Series 2002 Stock
will be  entitled  to payment  out of the assets of the  Company  available  for
distribution of an amount per share in cash equal to the Series 2002 Liquidation
Preference,  such amount to be paid on a pari passu basis and pro rata according
to their respective  liquidation  preferences  with the amount  distributable as
liquidation  preferences to the holders of the Series A Stock and Series B Stock
and before any distribution is made on any Junior Securities, including, without
limitation,  Common Stock of the Company.  If, upon any Series 2002 Liquidation,
the assets to be  distributed  among the  holders of shares of Series 2002 Stock
shall be  insufficient to permit payment to the holders of shares of Series 2002
Stock of the full Series 2002 Liquidation  Preference for each such share,  then
all of the assets of the Company to be so distributed as liquidation preferences
to the holders of shares of Series A Stock, Series B Stock and Series 2002 Stock
shall be  distributed  among the  holders of shares of Series A Stock,  Series B
Stock and Series 2002 Stock  ratably in  proportion to the amounts that would be
payable to such  holders if such assets  were  sufficient  to permit  payment in
full.

     7. Voting  Rights;  Amendment  and Waiver.  Except as  otherwise  expressly
provided  herein or as required  under the DGCL,  the Series 2002 Stock shall be
non-voting. For so long as any shares of Series 2002 Stock are outstanding,  the
Company  shall not,  without  the prior  approval  of the  holders of at least a
majority of the  then-outstanding  shares of Series 2002 Stock, given in writing
or at a  meeting,  consenting  or voting  (as the case may be)  separately  as a
series,  (i) effect any transaction or other action that would adversely  affect
the rights, preferences,  powers and privileges of the Series 2002 Stock or (ii)
designate or issue any shares of capital  stock of the  Company,  or any rights,
warrants or options  exchangeable  for or convertible  into
<PAGE>
                                                             Page 32 of 36 Pages


capital  stock of the  Company,  ranking pari passu with or senior to the Series
2002  Stock in the event of a  liquidation,  dissolution  or  winding  up of the
Company.  Notwithstanding  any other provision hereof, the holders of at least a
majority  of the  then-outstanding  shares of Series  2002 Stock  shall have the
right and  authority to waive any power,  preference or right of the Series 2002
Stock by delivering to the Company a written waiver executed by such holders.

     8.  Reservation of Subsequent Round  Securities.  The Company shall reserve
and keep  available  solely for issuance upon the conversion of shares of Series
2002 Stock,  such number and type of  Subsequent  Round  Securities as will from
time to time be sufficient to permit the conversion of all outstanding shares of
Series 2002 Stock for which a holder has elected to exercise its right  pursuant
to Section 5 to convert such shares into such Subsequent Round Securities,  and,
if  applicable,  shall  take all action to  increase  the  authorized  number of
Subsequent  Round  Securities  if  at  any  time  there  shall  be  insufficient
authorized but unissued  Subsequent  Round Securities to permit such reservation
or to permit the conversion of all  outstanding  shares of Series 2002 Stock for
which a holder has  elected to  exercise  its  rights  pursuant  to Section 5 to
convert such shares into such Subsequent Round Securities. The Company covenants
that all  Subsequent  Round  Securities  which shall be so issued  shall be duly
authorized,  validly issued,  fully paid and  non-assessable  by the Company and
free from any taxes,  liens and charges with respect to the issue  thereof.  The
Company  will take all such action as may be  necessary  to ensure that all such
Subsequent Round Securities may be so issued without violation of any applicable
law or regulation,  or of any requirement of any national securities exchange or
quotation system upon which the Common Stock may be listed.

     9.  Headings of  Subdivisions.  The  headings  of the various  subdivisions
hereof  are  for  convenience  of  reference  only  and  shall  not  affect  the
interpretation of any of the provisions hereof.

     10.  Severability  of  Provisions.  If any voting powers,  preferences  and
rights of the Series 2002 Stock and qualifications, limitations and restrictions
thereof set forth herein (as this  Certificate  of  Designations  may be amended
from time to time) are  invalid,  unlawful  or  incapable  of being  enforced by
reason of any rule of law or public policy, all other voting powers, preferences
and rights of Series 2002 Stock and qualifications, limitations and restrictions
thereof set forth herein (as so amended)  which can be given effect  without the
invalid,  unlawful or  unenforceable  voting powers,  preferences  and rights of
Series  2002 Stock and  qualifications,  limitations  and  restrictions  thereof
shall,  nevertheless,  remain in full force and  effect,  and no voting  powers,
preferences and rights of Series 2002 Stock and qualifications,  limitations and
restrictions  thereof herein set forth shall be deemed  dependent upon any other
such  voting   powers,   preferences   and  rights  of  Series  2002  Stock  and
qualifications, limitations and restrictions thereof unless so expressed herein.

     11.  Certain  Definitions.  The  following  terms shall have the  following
meanings  (with terms defined in the singular  having  comparable  meanings when
used in the plural and vice versa), unless the context otherwise requires:
<PAGE>
                                                             Page 33 of 36 Pages


     "Series  2002  Liquidation  Preference"  means an amount per share equal to
$1,000, as adjusted to reflect stock splits,  stock dividends,  combinations and
other similar occurrences.

     "Subsequent  Round of  Financing"  means the offer and sale for cash by the
Company of its equity securities.

     "Subsequent  Round  Securities"  means the  equity  securities  sold in the
Subsequent  Round of  Financing;  provided  that, to the extent that two or more
types or classes of equity securities are sold as a unit in the Subsequent Round
of Financing,  "Subsequent Round Securities" shall mean a unit consisting of the
same types or classes of equity securities, in the same proportion, as the units
sold in the Subsequent Round of Financing.

     12. Exclusion of Other Rights.  Except as may otherwise be required by law,
shares of Series  2002  Stock  shall not have any voting  powers,  designations,
preferences and rights,  other than those  specifically set forth herein (as may
be amended from time to time) and in the Certificate of Incorporation.

     13.  Registered  Holders.  A holder of Series 2002 Stock  registered on the
Company's stock transfer books as the owner of shares of Series 2002 Stock shall
be treated as the owner of such  shares for all  purposes.  All  notices and all
payments  required to be mailed to a holder of shares of Series 2002 Stock shall
be mailed to such holder's  registered  address on the Company's  stock transfer
books, and all dividend and redemption  payments to a holder of shares of Series
2002 Stock made hereunder shall be deemed to be paid in compliance hereof on the
date such payments are deposited  into the mail  addressed to such holder at his
registered address on the Company's stock transfer books.

                  [Remainder of page intentionally left blank]
<PAGE>
                                                             Page 34 of 36 Pages


          IN WITNESS  WHEREOF,  the undersigned has executed this Certificate of
Designations this ___ day of August, 2002.

                                                BLUEFLY, INC.


                                                By:_____________________________
                                                Name:
                                                Title:


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<FILENAME>bluefly13d_exhggg.txt
<DESCRIPTION>CERTIFICATE OF CORRECTION
<TEXT>
                                                                   Page 35 of 36


                                                                     Exhibit GGG


                           CERTIFICATE OF CORRECTION
                                       OF
           CERTIFICATE OF POWERS, DESIGNATIONS, PREFERENCES AND RIGHTS
                                       OF
                     SERIES 2002 CONVERTIBLE PREFERRED STOCK
                                       OF
                                  BLUEFLY, INC.


It is hereby certified that:

     1. The name of the corporation is Bluefly, Inc. (the "Company").

     2. In Section 5 of the Certificate of Powers, Designations, Preferences and
Rights  of  Series  2002  Convertible  Preferred  Stock of  Bluefly,  Inc.  (the
"Certificate of  Designations"),  which was filed with the Secretary of State of
the State of Delaware (the  "Secretary of State") on August 9, 2002,  the phrase
"and to stockholder approval (to the extent, and only to the extent, required by
the  rules of the  Nasdaq  SmallCap  Market  or any  other  national  securities
exchange or quotation system upon which the Common Stock may be listed from time
to time  (for the  avoidance  of  doubt,  it  being  understood  that,  prior to
conversion of shares of the Series 2002 Preferred Stock, such approval need only
be  obtained  as to the  portion  or  portions,  if  any,  of  Subsequent  Round
Securities that the holder would acquire upon conversion that exceeds the amount
that  could be  acquired  without  such  approval  under the rules of the Nasdaq
SmallCap Market or any other national  securities  exchange or quotation  system
upon which the Common Stock may be listed from time to time))" was inadvertently
omitted.  The phrase was intended to be included after the phrase  "[s]ubject to
the terms and conditions of this Section 5."

     3. This  Certificate  of  Correction  is hereby  filed  pursuant to Section
103(f) of the  General  Corporation  Law of the State of Delaware to correct the
first  sentence  of  Section 5 of the  Certificate  of  Designations  to read as
follows  (with the  remaining  provisions  of  Section 5 of the  Certificate  of
Designation  continuing to read as set forth in the  Certificate of Designations
filed with the Secretary of State on August 9, 2002):

     "Subject to the terms and  conditions of this Section 5 and to  stockholder
approval  (to the extent,  and only to the extent,  required by the rules of the
Nasdaq  SmallCap Market or any other national  securities  exchange or quotation
system  upon  which the  Common  Stock may be listed  from time to time (for the
avoidance of doubt, it being  understood  that, prior to conversion of shares of
the Series 2002 Preferred  Stock,  such approval need only be obtained as to the
portion or portions,  if any, of  Subsequent  Round  Securities  that the holder
would  acquire  upon  conversion  that exceeds the amount that could be acquired
without such approval under the rules of the Nasdaq SmallCap Market or any other
national securities exchange or quotation system upon which the Common Stock may
be listed from time to time)),  the holder of any share or shares of Series 2002
Stock shall have the right,  at its  option,  at any time and from time to time,
upon the  consummation of any Subsequent Round of Financing to convert each such
share (or fraction thereof) of Series 2002 Stock into a number of fully paid and
nonassessable  Subsequent  Round  Securities  (with  the  most  favorable  terms
received by any investor in such  Subsequent  Round of  Financing)  equal to the
quotient  obtained by dividing  the Series 2002  Liquidation  Preference  by the
lowest  price  per  Subsequent  Round  Security  paid  by any  investor  in such
Subsequent Round of Financing."

     IN WITNESS  WHEREOF,  the  undersigned  has executed  this  Certificate  of
Correction this 19th day of August, 2002.


                                               BLUEFLY, INC.

                                               By:  __________________________
                                               Name:
                                               Title:

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>6
<FILENAME>bluefly13d_exhhh.txt
<DESCRIPTION>SIDE LETTER
<TEXT>
                                                                   Page 36 of 36


                                                                     Exhibit HHH


                                 BLUEFLY, INC.
                               42 West 39th Street
                            New York, New York 10018


                                            August 19, 2002


Quantum Industrial Partners LDC
Kaya Flamboyan 9
Willemstad
Curacao
Netherlands-Antilles

SFM Domestic Investments LLC
c/o Soros Fund Management LLC
888 Seventh Avenue
New York, New York 10106

Gentlemen:

     Reference  is  hereby  made to the  Certificate  of  Powers,  Designations,
Preferences  and  Rights  of  Series  2002  Convertible   Preferred  Stock  (the
"Certificate of  Designations")  of Bluefly,  Inc. (the "Company").  Capitalized
terms used but not defined herein shall have the respective meanings ascribed to
such terms in the Certificate of Designations.

     Pursuant to Section 8 of the  Certificate of  Designations,  the Company is
required,  with respect to any Subsequent Round Securities to be issued upon the
conversion  of any shares of the Series 2002 Stock,  to "take all such action as
may be necessary to ensure that all such Subsequent  Round  Securities may be so
issued  without  violation  of  any  applicable  law  or  regulation,  or of any
requirement of any national  securities  exchange or quotation system upon which
the Common Stock may be listed." The Company hereby confirms that, in accordance
with  the  provisions  of  Section  8, it shall  put  forth a  proposal  seeking
stockholder  approval of the  conversion  rights  contained  in Section 5 of the
Certificate of  Designations  at the Company's next annual or special meeting of
stockholders  to the extent that such  stockholder  approval  of the  conversion
rights  contained in Section 5 of the Certificate of Designations is required by
the  rules of the  Nasdaq  SmallCap  Market  or any  other  national  securities
exchange or quotation system upon which the Common Stock may be listed from time
to time.


                                            Very truly yours,

                                            BLUEFLY, INC.

                                            By: _________________________
                                            Name:
                                            Title:

</TEXT>
</DOCUMENT>
</SUBMISSION>
