Exhibit 10.25


         THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT
BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.


                                  BLUEFLY, INC.

                             DEMAND PROMISSORY NOTE


$176,230.60
New York, New York                                            December 15, 2001

         FOR VALUE RECEIVED, the undersigned, BLUEFLY, INC., a Delaware
corporation (the "Payor" or the "Company"), promises to pay to the order of
Quantum Industrial Partners LDC or its registered assign (the "Payee"), upon
demand the principal sum of one-hundred seventy-six thousand, two-hundred thirty
dollars and sixty cents ($176,230.60) and interest on the outstanding principal
balance as set forth herein.

         1. Interest Rate; Payment.

            (a) The outstanding principal balance of this Demand Promissory Note
(this "Note") shall bear interest at an annual rate equal to 9% per annum, with
interest accruing, from and including the date hereof, on a cumulative,
compounding basis. Interest shall be computed on the basis of a 365- or 366-day
year, as the case may be, and the actual number of days elapsed, and shall be
payable only upon repayment of the principal on any Repayment Date (as defined
below) in cash.

            (b) The outstanding balance of any amount owed under this Note which
is not paid when due shall bear interest at the rate of 2% per annum (the
"Default Interest") above the rate that would otherwise be in effect under this
Note with the Default Interest accruing, from and including such due date, on a
cumulative, compounding basis.

            (c) The outstanding principal and all accrued and unpaid interest
shall be paid in full no later than December 15, 2004 (the "Maturity Date"),
unless repaid earlier pursuant to the provisions of Section 2 (the date of any
payment pursuant to Section 2 and the Maturity Date, collectively referred to as
a "Repayment Date"). On a Repayment Date, the Payor shall pay the applicable
amount of principal and interest in lawful money of the United States of America
by wire or bank transfer of immediately available funds to an account designated
by the Payee in writing from time to time.

         2. Prepayment.
<PAGE>
                                                                               2


            (a) Mandatory Prepayment.

               (i) Upon the occurrence of an Event of Default (under Section
3(d) or (e)), the outstanding principal of and all accrued interest on this Note
shall be accelerated and shall automatically become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which are
expressly waived by the Payor, notwithstanding anything contained herein to the
contrary.

               (ii) The Payee shall, at its sole option, have the right to
require the Payor to pay the outstanding principal of and all accrued interest
on this Note upon the occurrence of any of the following events: (1) an Event of
Default under Section 3(a), (b), (c), (f), (g) or (h), (2) the Company entering
into an agreement to effectuate any sale or other disposition of all or
substantially all of its assets, in one transaction or in a series of
transactions, (3) the Company entering into an agreement to effectuate any
consolidation or merger into another entity, or (4) any sale of a majority of
the outstanding equity of the Company (or any other event that constitutes a
Change of Control (as defined below) of the Company), in one transaction or in a
series of transactions. Immediately upon the occurrence of either of the events
set forth in clauses (1), (2) or (3) above, or immediately upon obtaining
knowledge that any person has entered into an agreement to effectuate, the event
set forth in clause (4) above, the Company shall give written notice of such
event to the Payee. Change of Control means any Person or "group" (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") other than Payee and its Affiliates or any group that
includes Payee and/or its Affiliates, becoming the beneficial owner, directly or
indirectly, of outstanding shares of 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 stockholders
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).

               (iii) Any mandatory prepayment under this Section 2(a) shall
include payment of reasonable costs and expenses, if any, associated with such
prepayment.

            (b) Optional Prepayment. The Company may, at its option, without
premium or penalty, repay the unpaid principal amount of the Note, at any time
in whole or from time to time in part, together with interest accrued thereon to
the date of prepayment. Any such prepayment shall be applied first to the
payment of accrued interest and then to repayment of principal. Upon any partial
prepayment of the unpaid principal amount of this Note, the Holder shall make
notation on this Note of the portion of the principal so prepaid.

         3. Events of Default. An "Event of Default" shall occur if:

            (a) the Payor shall default in the payment of the principal of or
interest payable on this Note, when and as the same shall become due and
payable, whether at maturity or at a date fixed for prepayment or by
acceleration or otherwise and

<PAGE>
                                                                               3


such default with respect to the payment of interest shall continue unremedied
for two days;

            (b) the Payor shall fail to observe or perform any covenant or
agreement contained in this Note, and such failure shall continue for five
business days after Payor receives notice of such failure;

            (c) any representation, warranty, certification or statement made by
or on behalf of the Payor in this Note or in any certificate, writing or other
document delivered pursuant hereto shall prove to have been incorrect in any
material respect when made;

            (d) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (A) relief
in respect of Payor or of a substantial part of Payor's respective property or
assets, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law (any such law, a "Bankruptcy Law"), (B) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for a substantial part of the property or assets of any Payor,
(C) the winding up or liquidation of any Payor; and such proceeding or petition
shall continue undismissed for 60 days, or an order or decree approving or
ordering any of the foregoing shall be entered;

            (e) the Payor shall (A) voluntarily commence any proceeding or file
any petition seeking relief under a Bankruptcy Law, (B) consent to the
institution of or the entry of an order for relief against it, or fail to
contest in a timely and appropriate manner, any proceeding or the filing of any
petition described in clause (d), (C) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for a substantial part of the property or assets of the Payor, (D) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (E) make a general assignment for the benefit of creditors, (F)
become unable, admit in writing its inability or fail generally to pay its debts
as they become due or (G) take any action for the purpose of effecting any of
the foregoing;

            (f) one or more judgments or orders for the payment of money in
excess of $250,000 in the aggregate shall be rendered against the Payor and such
judgment(s) or order(s) shall continue unsatisfied and unstayed for a period of
30 days;

            (g) the Payor shall default in the payment of any principal,
interest or premium, or any observance or performance of any covenants or
agreements, with respect to indebtedness (excluding trade payables and other
indebtedness entered into in the ordinary course of business) in excess of
$50,000 in the aggregate for borrowed money or any obligation which is the
substantive equivalent thereof and such default shall continue for more than the
period of grace, if any, or of any such Indebtedness or obligation shall be
declared due and payable prior to the stated maturity thereof;

<PAGE>
                                                                               4


            (h) any material provisions of this Note shall terminate or become
void or unenforceable or the Payor shall so assert in writing.

         4. Subordination.

            (a) Agreement of Subordination. The Payor covenants and agrees, and
the Payee likewise covenants and agrees, that (i) to the extent and in the
manner hereinafter set forth in this Section 4, the obligations of the Company
to pay the principal of and accrued interest on this Note (the "Obligations")
are hereby expressly made subordinate and junior in right of payment to the
prior payment in full of all amounts owing to, under the Financing Agreement,
dated March 30, 2001, as amended (the "Financing Agreement"), by and between the
Payor and Rosenthal & Rosenthal, Inc., a New York Corporation, whether
outstanding at the date hereof or hereinafter incurred (such Indebtedness being
hereinafter referred to as the "Senior Indebtedness"); (ii) the subordination is
solely for the benefit of any holders of Senior Indebtedness; and (iii) each
holder of Senior Indebtedness whether now outstanding or hereinafter created,
incurred, assumed or guaranteed shall be deemed to have extended or acquired
such Senior Indebtedness in reliance upon the covenants and provisions contained
herein.

            (b) Subordination Upon Certain Events. Upon the occurrence of any
Event of Default under Sections 3(d) or (e) of this Note:

               (i) Upon any payment or distribution of assets of the Payor to
creditors of the Company, holders of Senior Indebtedness shall be entitled to
receive indefeasible payment in full of all obligations with respect to the
Senior Indebtedness before the holder of this Note shall be entitled to receive
any payment in respect of the Obligations.

               (ii) Until all Senior Indebtedness is paid in full, any
distribution to which the Payee would be entitled but for this Section 4 shall
be made to holders of Senior Indebtedness, as their interests may appear, except
that the Payee may receive securities that are subordinate to the Senior
Indebtedness to at least the same extent as this Note.

               (iii) For purposes of this Section 4, a distribution may consist
of cash, securities or other property, by set-off or otherwise.

               (iv) Notwithstanding the foregoing provisions of this Section
4(b), if payment or delivery by the Company of cash, securities or other
property to the Payee is authorized by an order or decree giving effect, and
stating in such order or decree that effect is given, to the subordination of
this Note to the Senior Indebtedness, and made by a court of competent
jurisdiction in a proceeding under any applicable bankruptcy or reorganization
law, payment or delivery by the Company of such cash, securities or other
property shall be made to the Payee in accordance with such order or decree.

            (c) Limitation on Payment.
<PAGE>
                                                                               5


               (i) Upon receipt by the Company and the Payee of a Blockage
Notice (as defined below), then unless and until (A) all defaults in the payment
of any Senior Indebtedness (the "Senior Defaults") that gave rise to the
Blockage Notice shall have been remedied or effectively waived or shall have
ceased to exist or (B) the Senior Indebtedness in respect of which such Senior
Defaults shall have occurred shall have been paid in full or (C) a notice of
acceleration of the maturity of such Senior Indebtedness shall have been
transmitted to the Company in respect of such Senior Defaults, no direct or
indirect payment (in cash, property, securities or by set-off or otherwise) of
or on account of the principal of or interest on this Note or in respect of any
redemption, retirement, purchase or other acquisition of this Note shall be made
during any period prior to the expiration of the Blockage Period (as defined
below).

               (ii) For purposes of this Section 4, a "Blockage Notice" is a
notice of a Senior Default that in fact has occurred and is continuing, given to
the Company and the Payee by any holders of Senior Indebtedness then outstanding
(or their authorized agent); provided, however, that no such notice shall be
effective as a Blockage Notice if an effective Blockage Notice shall have been
given within 360 days prior thereto.

               (iii) For purposes of this Section 4, a "Blockage Period" with
respect to a Blockage Notice is the period commencing upon the Company's receipt
of such Blockage Notice and having the duration set forth in the particular
agreement establishing the Senior Indebtedness to which the Company is a party;
provided, that, such Blockage Period is no more than 90 days.

         Notwithstanding the foregoing, the Blockage Period shall be
inapplicable or cease to be effective if an Event of Default pursuant to Section
3(d) or (e) shall have occurred. In addition, any Blockage Period shall cease to
be effective if at any time during such period (i) substantial assets of the
Company are sold or otherwise disposed of outside of the ordinary course of
business for less than fair value or (ii) payment or any distribution of any
character, whether in cash, securities or other property of the Company shall be
made to or received by any creditor on any indebtedness which is on the same
level of priority with or junior and subordinate in right of payment to this
Note.

         Upon the expiration or termination of any Blockage Period, the Payee
shall be entitled to exercise any of its rights with respect to this Note other
than any right to accelerate the maturity date of this Note based upon the
occurrence of any Event of Default in respect thereto which has been cured or
otherwise remedied during the Blockage Period.

            (d) Payments and Distributions Received. If the Payee shall have
received any payment from or distribution of assets of the Company in respect of
Obligations in contravention of the terms of this Section 4 before all Senior
Indebtedness is paid in full, then and in such event such payment or
distribution shall be received and held in trust for and shall be paid over or
delivered to the holders of Senior Indebtedness to the extent necessary to pay
all such Senior Indebtedness in full.

<PAGE>
                                                                               6


            (e) Proofs of Claim. If, while any Senior Indebtedness is
outstanding, any Event of Default under Section 3(d) or (e) of this Note occurs,
the Payee shall duly and promptly take such action as any holder of Senior
Indebtedness may reasonably request to collect any payment with respect to this
Note for the account of the holders of the Senior Indebtedness and to file
appropriate claims or proofs of claim in respect of this Note. Upon the failure
of the Payee to take any such action, each holder of Senior Indebtedness is
hereby irrevocably authorized and empowered (in its own name or otherwise), but
shall have no obligation, to demand, sue for, collect and receive every payment
or distribution referred to in respect of this Note and to file claims and
proofs of claim and take such other action as it may deem necessary or advisable
for the exercise or enforcement of any of the rights or interests of the Holder
with respect to this Note.

            (f) Subrogation. After all amounts payable under or in respect of
Senior Indebtedness are paid in full in cash, the Payee shall be subrogated to
the rights of holders of Senior Indebtedness to receive payments or
distributions applicable to Senior Indebtedness to the extent that distributions
otherwise payable to the Payee have been applied to the payment of Senior
Indebtedness. A distribution made under this Section 4 to a holder of Senior
Indebtedness which otherwise would have been made to the Payee is not, as
between the Company and the Payee, a payment by the Company on Senior
Indebtedness.

            (g) Relative Rights. This Section 4 defines the relative rights of
the Payee and the holders of Senior Indebtedness. Nothing in this Section 4
shall (i) impair, as between the Company and the Payee, the obligation of the
Company, which is absolute and unconditional, to pay principal of and interest
(including Default Interest) on this Note in accordance with its terms; (ii)
effect the relative rights of the Payee and creditors of the Company other than
holders of Senior Indebtedness; or (iii) prevent the Payee from exercising its
available remedies upon an Event of Default, subject to the rights, if any,
under this Section 4 of holders of Senior Indebtedness.

            (h) Subordination May Not Be Impaired by the Company. No right of
any holder of any Senior Indebtedness to enforce the subordination of the
Obligations evidenced by this Note shall be impaired by any failure by the
Company or such holder of Senior Indebtedness to act or by the failure of the
Company or such holder to comply with this Note. The provisions of this Section
4 shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Senior Indebtedness is rescinded or must
otherwise be returned by any holder of Senior Indebtedness as a result of the
insolvency, bankruptcy or reorganization of the Company or otherwise, all as
though such payment had not been made.

            (i) Payments. A payment with respect to principal of or interest on
the Obligations shall include, without limitation, payment of principal of and
interest on this Note, and any payment on account of mandatory prepayment
provisions.

            (j) Section Not to Prevent Events of Default. The failure to make a
payment on account of principal of or interest on or other amounts constituting
the Obligations by reason of any provision of this Section 4 shall not be
construed as preventing the occurrence of an Event of Default under Section 3.

<PAGE>
                                                                               7


         5. Suits for Enforcement.

            (a) Upon the occurrence of any one or more Events of Default, the
holder of this Note may proceed to protect and enforce its rights by suit in
equity, action at law or by other appropriate proceeding in aid of the exercise
of any power granted in this Note, or may proceed to enforce the payment of this
Note, or to enforce any other legal or equitable right it may have as a holder
of this Note.

            (b) The holder of this Note may direct the time, method and place of
conducting any proceeding for any remedy available to itself.

            (c) In case of any Event of Default, the Payor will pay to the
holder of this Note such amounts as shall be sufficient to cover the reasonable
costs and expenses of such holder due to such Event of Default, including
without limitation, costs of collection and reasonable fees, disbursements and
other charges of counsel incurred in connection with any action in which the
holder prevails.

         6. Notices. All notices, demands and other communications provided for
or permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telecopier, courier
service, overnight mail or personal delivery:

              (i)     if to Quantum Industrial Partners LDC:

                      Kaya Flamboyan 9,
                      Villemstad
                      Curacao
                      Netherlands-Antilles

                      with a copy to:

                      Soros Fund Management LLC
                      888 Seventh Avenue
                      New York, NY 10106
                      Telecopy:  (212) 664-0544
                      Attn: Richard Holahan, Esq.

                      and a copy to:

                      Paul, Weiss, Rifkind, Wharton & Garrison
                      1285 Avenue of the Americas
                      New York, New York 10019-6064
                      Telecopy:    (212) 757-3990
                      Attention:   Paul D. Ginsberg, Esq

              (ii)    if to the Company:

                      Bluefly, Inc.

<PAGE>
                                                                               8


                      42 West 39th Street, 9th Floor
                      New York, New York 10018
                      Telecopy:    (212) 354-3400
                      Attention:   Jon Morris

                      with a copy to:

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

         All such notices and communications shall be deemed to have been duly
given when delivered by hand, if personally delivered; when delivered by courier
or overnight mail, if delivered by commercial courier service or overnight mail;
five (5) business days after being deposited in the mail, postage prepaid, if
mailed; and when receipt is mechanically acknowledged, if telecopied.

         7. Successors and Assigns. This Note shall inure to the benefit of and
be binding upon the successors and permitted assigns of the parties hereto. The
Payor may not assign any of its rights under this Note without the prior written
consent of Payee. The Payee may assign all or a portion of their rights or
obligations under this Note to an Affiliate without the prior written consent of
the Payor.

         8. Amendment and Waiver.

            (a) No failure or delay on the part of the Payor or Payee in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Payor or
Payee at law, in equity or otherwise.

            (b) Any amendment, supplement or modification of or to any provision
of this Note, any waiver of any provision of this Note and any consent to any
departure by the Payor from the terms of any provision of this Note, shall be
effective (i) only if it is made or given in writing and signed by the Payor and
the Payee and (ii) only in the specific instance and for the specific purpose
for which made or given.

         9. Headings. The headings in this Note are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

         10. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.

<PAGE>
                                                                               9


         11. Costs and Expenses. The Payor hereby agrees to pay on demand all
reasonable out-of-pocket costs, fees, expenses, disbursements and other charges
(including but not limited to the fees, expenses, disbursements and other
charges of Paul, Weiss, Rifkind, Wharton & Garrison, special counsel to the
Payee) of the Payee arising in connection with any consent or waiver granted or
requested hereunder or in connection herewith, and any renegotiation, amendment,
work-out or settlement of this Note or the indebtedness arising hereunder.

         12. Waiver of Jury Trial and Setoff. The Payor hereby waives trial by
jury in any litigation in any court with respect to, in connection with, or
arising out of this Note or any instrument or document delivered pursuant to
this Note, or the validity, protection, interpretation, collection or
enforcement thereof, or any other claim or dispute howsoever arising, between
any Payor and the Payee; and the Payor hereby waives the right to interpose any
setoff or counterclaim or cross-claim in connection with any such litigation,
irrespective of the nature of such setoff, counterclaim or cross-claim except to
the extent that the failure so to assert any such setoff, counterclaim or
cross-claim would permanently preclude the prosecution of the same.

         13. Consent to Jurisdiction. The Payor hereby irrevocably consents to
the nonexclusive jurisdiction of the courts of the State of New York and of any
federal court located in such State in connection with any action or proceeding
arising out of or relating to this Note or any document or instrument delivered
pursuant to this Agreement.

         14. Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provisions hereof shall not be in any way impaired,
unless the provisions held invalid, illegal or unenforceable shall substantially
impair the benefits of the remaining provisions hereof.

         15. Entire Agreement. This Note is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein. This Note
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

         16. Further Assurances. The Payor shall execute such documents and
perform such further acts (including, without limitation, obtaining any
consents, exemptions, authorizations or other actions by, or giving any notices
to, or making any filings with, any governmental authority or any other Person)
as may be reasonably required or desirable to carry out or to perform the
provisions of this Note.

                                           BLUEFLY, INC.

                                           By: /s/ E. Kenneth Seiff
                                               ---------------------------------
                                           Name: E. Kenneth Seiff
                                           Title:  Chief Executive Officer