Qurate Retail Inc. called it quits on its money-losing Zulily business.
The specialist in video commerce said on Thursday that Zulily was sold to Los Angeles-based private equity firm Regent LP for an undisclosed amount. However, Qurate said that based on the terms of the sale agreement it could “receive an earnout in future years.” For that to happen, Zulily’s executive team will have to meet certain business targets.
Rawlinson said the move aligns with the Project Athens transformation strategy Qurate shared last June.
“We are confident Regent is the right partner for Zulily to continue serving its customers, while benefiting from Regent’s depth of operational and strategic expertise in the retail and apparel sectors,” said David Rawlinson, Qurate Retail’s president and CEO. “We are in the midst of a turnaround at Qurate Retail. This divestiture will allow our management team to better focus on our core video commerce assets, QVC and HSN, and the Cornerstone Brands, while preserving liquidity to further strengthen our balance sheet.”
Qurate in March eliminated 85 roles at Zulily after cutting 400 corporate jobs a month earlier.
The online mom-and-baby e-tailer saw its revenue drop 17 percent to $192 million for the first quarter ended March 31. The decline came from slowing traffic to the Zulily site, although that was partially offset by a 9 percent higher average selling price. In the prior fourth quarter ended Dec. 22, the company also posted a 28 percent decline in revenue to $254 million due in large part to lower unit volume. The division cut jobs last year, and also closed its Pennsylvania fulfillment center in Bethlehem. During the third quarter ended Sept. 30, the revenue decline was 39 percent to $200 million. At the time, CEO David Rawlinson said Zulily had signed a “couple of hundred new brands of various types, including 15 to 20 national brands,” a move to boost conversion and revenue. Still, losses piled up.
Zulily, originally a flash-sale site, has been struggling for some time—even when it was acquired by home shopping platform QVC in 2015 for $2.4 billion. QVC’s parent Liberty Interactive Corp. was renamed Qurate Retail in 2018.
Terry Boyle, a former Nordstrom executive and e-commerce veteran, was named Zulily’s president and CEO in March 2022. He is expected to continue to lead Zulily’s management team.
“We are excited to partner with the Zulily team to help the company return to its entrepreneurial roots as an independent business,” Michael Reinstein, Regent’s chairman, said. “Zulily has been a trailblazer in using technology to create a compelling online customer experience. Their revolutionary logistics and fulfillment network has also set a new industry standard, and we are excited to leverage its immense potential to grow the Zulily business in new markets.”
Regent is no stranger to fashion. In March it acquired women’s specialty apparel chain Intermix from Altamont Capital Partners. It also counts Club Monaco (acquired from Ralph Lauren Corp. in 2021), La Senza (acquired from former Victoria’s Secret parent who was then known as L Brands in 2018) and Escada (acquired Megha Mittal in 2019) as brands in its portfolio.
Qurate has repaid about $80 million of Zulily’s outstanding borrowing. The brand will no longer be a co-borrower in QVC Inc.’s bank credit facility.