Seattle e-commerce retailer Zulily is making a comeback.
Once known for its flash sales of parent-child products, the company launched in 2009 and quickly rose to the top, continuing to captivate the tech world with a sky-high initial public offering in 2013. Business began to decline, and after several years of struggle and two ownership changes, it closed in December. The company began procedures in lieu of bankruptcy that month and announced the sale of its inventory and warehouse assets in January.
On Thursday, Zulily began yet another chapter.
Beyond, the owner of retail giants Overstock and Bed Bath & Beyond, announced that it has acquired the Zulily brand and website for $4.5 million, a deal that was once valued at more than $7 billion. That's a relatively small amount.
Utah-based Beyond has used a similar strategy before, selling Bed Bath & Co. last June, shortly after the former retailer filed for Chapter 11 bankruptcy protection in April. – Acquired Beyond. At the time, Beyond said it would relaunch the Overstock brand as Bed Bath & Beyond.
Beyond announced Thursday that it plans to relaunch the Zulily website by the end of the second quarter.
“This acquisition marks a strategic step in Beyond's transformation and long-term growth,” Marcus Lemonis, Beyond's executive chairman, said in a statement. “This acquisition marks a strategic step in Beyond's transformation and long-term growth.” He added that he is excited to leverage the database. .
Zulily co-founder Darrell Cavens said in an email Thursday that it's “gratifying to see someone so passionate about this brand,” and we'll see what they do next. He said he was excited about it.
But for former employees, “there remains great dissatisfaction” with the way the company was run in its final year, one former employee told The Seattle Times on Thursday. The person worked at Zulily from its pre-IPO days through its final year, but requested anonymity to protect his current job.
They were happy to hear the Zulily name would live on, but said the website, company and brand would “never be the same.”
It's unclear whether Zulily will be based in Seattle in the future. A Beyond spokesperson said the acquisition includes Zulily's intellectual property assets such as its website, customer database, social media accounts and software, but does not include Zulily's former employees or physical headquarters. Ta. Beyond does not have an office in Seattle, a spokesperson said.
Albert Squiers, a technology recruiter at Seattle-based Fuel Talent, said it's not a huge change for the city. After last year's layoffs, Seattle is already “grieving the loss of what was once one of the fastest-growing tech companies,” he said.
The rise and decline of Zulily
Cavens and Mark Vadon, former executives at online jewelry retailer Blue Nile, launched Zulily in 2009, and the startup quickly achieved “unicorn” status. This nickname is only given to a select few startups whose valuation exceeds his $1 billion.
Zulily went public in 2013 at a valuation of $2.6 billion. However, the company began to decline immediately after its IPO.
In 2015, QVC and home shopping network owner Qurate Retail acquired Zulily in a $2.4 billion deal. Curate owned Zulily for eight years before selling it to private equity firm Regent in May 2023. Financial details of the sale were not made public.
By December, Zulily had laid off more than 800 employees, including 300 in Seattle. A few weeks later, Zulily closed its doors and filed for alternative bankruptcy. That means a third-party trustee will liquidate Zulily's assets.
Douglas Wilson Cos., a San Diego-based business services company that has become Zulily's wind-down receiver, said at the time that it plans to retain 75 Zulily employees to support inventory and the company's warehouses. Stated.
Douglas Wilson, CEO and chairman of the company of the same name, declined to comment Thursday. Regent could not be reached.
Just before its closure, Zulily sued e-commerce rival Amazon, blaming its downfall on Amazon's policies that allegedly kept sellers away from competitors. Zulily accused the e-commerce giant of using the same anticompetitive business practices that were at the center of the Federal Trade Commission's antitrust case against Amazon last year.
Amazon disputes these claims and says it uses the same tools on its website as other retailers to highlight low prices.
Zulily announced in January that it would sell $85 million worth of inventory and warehouse assets from two facilities in Ohio and Nevada. Last month, Zulily also began auctioning off “intangible assets” such as domain names, customer data, social media assets and code for its own apps.
Hilco Streambank, which handles intellectual property sales, announced that Zulily's sales in 2023 reached $666 million. Hilco had originally set a March 13 deadline for companies to express interest in acquiring Zulily's assets, but Beyond announced the deal just days earlier.
According to financial results released last month, Beyond reported a net loss of $308 million for fiscal year 2023. Sales were $1.6 billion, down 19% from the previous year.
“As a team, we are not satisfied with our fourth quarter results,” Chief Financial and Administrative Officer Adrian Lee said, adding that the company is taking steps to grow revenue and reduce fixed costs. Ta.
Beyond bought Bed Bath & Beyond for $21.5 million in June of last year, and paid Zulily $4.5 million.
“Their brand still has meaning.”
Jeff Shulman, a business professor at the University of Washington, is optimistic that the acquisition could give Zulily new life.
Schulman said the company initially underperformed, in part because it couldn't define its brand and give shoppers a reason to come back to Zulily. The company is now shifting its focus back to its flash sale model in an effort to differentiate itself from other e-commerce retailers like Amazon, where customers have access to products 24/7.
With Zulily, shoppers can experience the thrill of finding limited-time discounts and making quick decisions, Shulman continued.
Zulily's business model “worked last time. I think it worked really well,” Schulman said. “The problem is…they’ve outgrown the business, they’ve outgrown the brand.
“This acquisition shows that what Zulily has done is impressive and could be a company that has a lot of value and makes sense… Their brand still means something.” It is.”
Sucharita Kodali, a Forrester analyst who has followed the company since its early days, has a different take on the sale.
Kodali sees it less as a resurgence of Zulily and more as a sale of email addresses and social media handles. Beyond plans to relaunch the Zulily website, but Kodari said Beyond may end up using the site solely to redirect shoppers to other platforms. Similarly, the relaunch is not a return to the flash sale model, Kodari said. That premise is already built into most retailers' plans.
Before Thursday's acquisition, Kodari said the company had always had a “challenging business model,” with a particular focus on slow delivery speeds.
“How many times do you have to die to be dead?” she continued. “This is not an outcome that should be celebrated.”
Zulily's website, which once featured a note instructing customers on how to secure products they ordered before the company shut down, now says “coming soon.”
