A Zulily gift card (source: Qurate Retail)
Not unlike Walmart, Qurate Retail Group has divested Zulily to focus on its core business. The once popular flash sale site, targeting young mothers with deals across brands and categories including apparel, home and garden and toys, was sold to Los Angeles-based investment firm Regent.
Regent has amassed a portfolio of consumer brands including Playtex, Sassoon, La Senza, Club Monaco and Escata. Qurate Retail said the divestiture was part of its Project Athens transformation strategy, announced in June 2022 to “optimize its brand portfolio.”
“We are in the midst of a turnaround at Qurate Retail,” said David Rawlinson, its president and CEO, in a release. “This divestiture will allow our management team to better focus on our core video commerce assets QVC and HSN and Cornerstone Brands, while preserving liquidity to further strengthen our balance sheet.”
Terms of the deal were not disclosed, but the acquisition was certainly a significant discount to the $2.4 billion parent Liberty Interactive paid for Zulily in August 2015. Qurate is majority owned by billionaire Liberty chairman John Malone.
Zulily was founded in 2009 by former Blue Nile executives Mark Vadon and Darrell Cavens, and went live the following year, initially focused on children’s apparel. It went public in 2013 at a valuation of $2.6 billion. Zulily fulfills its customer orders through drop shipping by seller partners.
Earlier this month, Qurate Retail reported a 17% drop in Zulily’s Q1 revenue to $192 million – an improvement over a 28% decline in Q4 – and a $43 million operating loss. This compared to a 13% revenue decrease at Cornerstone Brands and a 12% decline at QVC.
Qurate said Zulily’s revenue hit was driven by lower unit volume and a drop in shipping and handling revenue, as site traffic declined. A March headcount reduction at Zulily was expected to result in annual savings of $14 million, $11 million of it realized in 2023.
As a whole, Qurate reported an 80% increase in operating income to $176 million, driven by significant gains at QVC and HSN.