Zulily’s Last Checkout: The Retail Road to Its Online Closure 

Online retailer Zulily is calling it quits. 

In the latest update from PYMNTS regarding Zulily, once navigating the choppy waters of a fiercely competitive sea, has disclosed its intentions of undergoing a liquidation process.  

In fact, just seven months into its tenure under new ownership, the Seattle-based online retailer is in the process of winding down its operations. 

As of Friday (Dec. 22), the online retailer has officially halted its operations. The company shared in a statement on its no-longer-active website that it has begun a process called an assignment for the benefit of creditors (ABC). Instead of going through bankruptcy, this involves selling off Zulily’s assets in the next 12 to 18 months. 

“This decision was not easy nor was it entered into lightly,” said Ryan Baker, vice president of Douglas Wilson Companies in a statement. “However, given the challenging business environment in which Zulily operated, and the corresponding financial instability, Zulily decided to take immediate and swift action.” 

The confirmation that Zulily has ceased operations marked the initial public acknowledgment of the company’s status. Before this, there was uncertainty about whether the company was in the process of closing down or had already completed its operations. The announcement on Friday came after the website suddenly went offline about a week earlier, showing a blank page with a “We are down for maintenance” message. This message appeared after a short period during which Zulily’s homepage had phrases like “final sale” and “all items must go.” 

Regent and Baker, the parent company of Zulily, didn’t share additional information about the retailer’s financial situation. There was no immediate response from either party when asked for comments. 

Prior to the acquisition, Zulily had experienced financial challenges, particularly in its final year as part of Qurate’s brand portfolio. Zulily reported a 17% decline in revenue in the first quarter, dropping from $232 million to $192 million year over year (YoY), accompanied by a $43 million operating loss for the same period. 

Events Prior to Zulily Shutdown

Earlier this month, revelations surfaced following mandatory notices submitted to state employment authorities, indicating that Zulily intended to terminate over 800 employees in Washington, Nevada, and Ohio.  

Shortly after the announcement of these widespread layoffs, Zulily took legal action against Amazon, alleging the eCommerce giant participated in price fixing and pressured third-party sellers and wholesale suppliers to artificially increase prices on Zulily. The lawsuit contended that Amazon had “abused its monopoly power,” hindering Zulily’s ability to compete in the online retail space. Amazon, however, denies any wrongdoing. 

In May, Regent acquired Zulily from Qurate Retail, the parent company of QVC and HSN, for an undisclosed amount.  

In the latter part of 2022, PYMNTS highlighted that Qurate Retail was encountering challenges while dealing with surplus inventory in the eCommerce market post-pandemic. 

In a press release, President and CEO David Rawlinson II mentioned that the third quarter 2022 earnings results of the company revealed a highly competitive promotional landscape and diminished consumer sentiment. 

During that period, Qurate’s revenue fell 13%, amounting to $2.7 billion, and its eCommerce revenue also fell 13%, reaching $1.7 billion. 

In the same time frame, QVC International revenue fell 21%, QxH revenue dropped 8%, and Zulily’s declined 39%. On the positive side, another retail brand under the Qurate umbrella, Cornerstone, managed to increase revenue by 8%. 

The company had also announced in the release that it was restructuring its presence in Europe. In fact, Qurate had entered into an agreement for the sale and leaseback of its United Kingdom and Germany fulfillment centers for about £68 million (about $77 million) and €97 million (about $96 million), respectively. The company had planned to close this deal in the first quarter of 2023. 

Qurate faced similar issues in the last quarter, with the company’s revenue decreasing by 16% at that time. 

However, as the company headed into the fourth quarter, sentiment surrounding two quarters of weak earnings results led Qurate to reevaluate its strategy. 

Decreased Consumer Sentiment

Late last year, retailers were eager to encourage consumers fatigued by inflation to spend more. They intensified promotions, grappling with the challenge of clearing out excess inventory that had already been marked down. 

The abundance of deals was a sharp departure from the year prior. In fact, two holiday seasons ago, shoppers had started buying gifts early to avoid out-of-stock and shipping delays. Concerns about not getting hot items had meant consumers were willing to pay up. 

Then in 2022, retailers found themselves with a surplus of merchandise as consumers said inflation was twice as bad as the government actually reported.  

Read more: Consumers Say Inflation Twice as Bad as Government Reports 

Shoppers were hesitant to spend due to increased costs in areas such as food, housing, healthcare, and other essential items, with inflation reaching levels not seen in four decades. Additionally, people were allocating more of their money to travel and experiences following over two years of COVID-related restrictions. 

Read more: 60% of Leisure Travel Expenses Fueled by Gen X and Millennials