Zulily announced a jersey sponsorship with the Seattle Sounders and Reign FC soccer clubs in 2019. (GeekWire File Photo / Kevin Lisota)
Zulily is having a new sale — just not the one most people expected this week.
"All sales are final during Zulily's going-out-of-business sale," reads an FAQ page on the retailer's website.
GeekWire first reported Thursday that the Seattle-based company will shut down three offices, including its Seattle headquarters and two warehouses in Ohio and Nevada. It's laying off more than 800 employees.
Zulily was already struggling in recent years, before Los Angeles-based private equity firm Regent acquired the online retailer in April.
But the sudden evaporation of a business once valued at more than $7 billion certainly comes as a shock to many folks.
A former Zulily board member told GeekWire on Friday they were "depressed" to see what was happening to a company that was once a pillar of Seattle's tech ecosystem.
On LinkedIn, current and former employees shared memories and expressed gratitude for their time at the "Zu."
- "The experiences I gained, the challenges I overcame, and the bonds I formed have profoundly influenced me over the last 12 years and I think they will for the rest of my life," Sabeeka Dar, a former business development leader at Zulily, wrote on LinkedIn.
- "What a journey it has been," said Derek Elmstrom, a 9-year Zulily veteran. "I've learned so much, grown as a person, and met some incredible people. Zulily was an incredible place and it is sad to see it go like this.
- "An unmatched learning experience. And an adventure I could never have imagined," said former vice president Kristin Toth. "Along the way, I met fantastic people, learned an absolute ton, and stretched in ways that have made me what I am today."
Former Blue Nile executives Darrell Cavens and Mark Vadon launched Zulily in 2010. The e-commerce site quickly gained traction by offering daily deals on products for moms and kids. The company used an unusual business model, selling products on its site before ordering them from vendors.
Zulily raised investment from backers such as Andreessen Horowitz and Maveron, and grew rapidly, reporting revenue of $331 million in 2012, up from $143 million in the prior year. Active customers nearly doubled year-over-year to 1.58 million in 2012.
The company went public in 2013 with a spectacular IPO that valued it at around $4.5 billion.
Former Zulily CEO Darrell Cavens (center, with his son) and co-founder Mark Vadon (left of Cavens) celebrate the company's 2013 IPO. (File Photo)
The company reported $1.2 billion in sales for 2014, but then saw its stock tank as revenue began to slow. Zulily struggled to meet customer expectations for shipping times, among other issues, as it competed against Amazon and other e-commerce giants.
Some customers also complained about the amount of items Zulily was adding to its site as it expanded rapidly from mainly selling children's items to other categories, such as home accessories and women and men's clothing.
Qurate, the parent company of QVC previously known as Liberty Interactive, acquired Zulily in 2014 for $2.4 billion.
Zulily's growth stagnated for the first few years under new ownership but the company began to boost its customer base and revenue in 2018.
Cavens stepped down as CEO that year, replaced by former Amazon exec Jeff Yurcisin.
The company remained prominent in the Seattle area, inking a jersey sponsorship deal in 2019 with the Seattle Sounders and Reign FC pro soccer clubs. It employed 3,500 people at the beginning of 2019.
But Zulily's business began declining in that year, leading to layoffs and other cuts, and struggles continued into the pandemic, which caused supply chain problems.
Zulily reported a 17% drop in revenue during the first quarter of this year, to $192 million, and a $43 million operating loss.
Qurate announced in May that it sold Zulily to Regent, citing a need to focus on its core video assets including QVC and HSN.
"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, president and CEO of Qurate, said in a statement.
Regent has acquired more than 30 businesses since 2015, including consumer retail and apparel brands.
"We are excited to partner with the Zulily team to help the company return to its entrepreneurial roots as an independent business," Michael Reinstein, chairman of Regent, said in a statement in May. "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."
Following the acquisition to Regent, Zulily went through two rounds of layoffs. The company did not provide severance for employees who were let go in June, according to affected workers.
It also moved into a smaller headquarters building following Regent's purchase, ditching its office near the Seattle waterfront. GeekWire visited the new office in October. The space had office furniture and desks, but there were only a handful of employees.
Meanwhile, vendors who sell to Zulily started reporting unpaid invoices this year after the company was acquired by Regent.
Natasha Fiorentino, owner of a small business in Florida called Micro Me that sells children's apparel, has sold products to Zulily as a vendor for more than a decade. She never ran into problems getting paid.
But after the acquisition by Regent, she told GeekWire that she's dealt with late payments, and said her company is currently owed money for products that Zulily already sold on its marketplace.
"For them to leave me hanging, it's a huge hit, and right before Christmas," said Fiorentino, a single mother of two kids.
GeekWire reported Thursday on two lawsuits filed against Zulily by a logistics company and a software development consultancy in recent months, both alleging unpaid invoices.
We've reached out to Zulily and Regent, and we'll update this story if we hear back.
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