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Zulily Begins Liquidation After Several Rounds of Layoffs

Zulily

Citing a challenging business environment, online retailer Zulily is closing its doors.

The company announced its liquidation process on its website Wednesday (Dec. 27), informing customers that it hopes to fill all ending orders in the weeks ahead.

“This decision was not easy nor was it entered into lightly,” the company announcement said. “However, given the challenging business environment in which Zulily operated, and the corresponding financial instability, Zulily decided to take immediate and swift action.”

The company is not declaring bankruptcy, but is instead using a process to unwind its business called an Assignment for the Benefit of Creditors (ABC). Zulily has transferred its assets and business in trust to Zulily ABC, LLC, a system that will sell those assets to pay creditors.

Zulily was founded in 2010 and went public on the Nasdaq in 2013. Two rocky years later, the company was acquired for $2.4 billion by QVC parent company Qurate.

The sale, PYMNTS wrote at the time, came as Zuliy’s “flash sales business model became a common sight among many online retailers, like Rue La La and Gilt” as well as larger companies like Walmart and Amazon, creating “ever-increasing competition in not just selling but also acquiring quality stock.”

Last year, Qurate reported it was facing difficult circumstances as it found itself saddled with excess inventory in a post-pandemic eCommerce market.

President and CEO David Rawlinson II in November described an “intensely promotional environment and weakened consumer sentiment” as the company reported earnings, with Zulily’s revenue falling 39%.

A report by the Associated Press notes that Zulily CEO Terry Boyle left the firm at the end of October as financial troubles mounted in the wake of its purchase by private equity firm Regent from Qurate in May. The report also says the liquidation follows a number of rounds of job cuts as Zulily tried to compete with Amazon.

Elsewhere on the eCommerce front, PYMNTS last week examined consumer hesitancy in combining social media and online shopping, noting that research shows that trust is the key reason driving this unease.

“Despite the potential of social media as a retail platform, many consumers avoid making purchases via social media due to security concerns,” that report said, citing data from the PYMNTS Intelligence study “Monetizing Social Media.”

“The study revealed that 37% of consumers who do not transact on social media are skeptical about sharing their personal data safely, while 31% doubt the legitimacy of sellers on social media platforms. Another common reason consumers don’t transact on social media is the apprehension regarding product quality, cited by 27% of respondents.”