QVC owner divests money-losing mom-and-baby Zulily email site – Sourcing Journal
Qurate Retail Inc. announced it is exiting its loss-making Zulily business.
The video commerce specialist said Thursday that Zulily has been 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 deal, it “could receive an earnout in the coming years.” For that to happen, Zulily’s leadership team must achieve certain business goals.
Rawlinson said the move is in line with Project Athens’ transformation strategy, which Qurate unveiled last June.
“We are confident that Regent is the right partner for Zulily to continue serving its customers while benefiting from Regent’s deep operational and strategic expertise in the retail and apparel sectors,” said David Rawlinson, President and CEO of Qurate Retail . “We are in the midst of a trend reversal at Qurate Retail. This divestiture will allow our management team to better focus on our core video retail assets, QVC and HSN, and the Cornerstone brands, while preserving liquidity to further strengthen our balance sheet.”
Qurate cut 85 jobs at Zulily in March after cutting 400 jobs at the company a month earlier.
The online e-retailer for mom and baby saw sales fall 17 percent to $192 million in the first quarter ended March 31. The decline was due to the slowdown in traffic to the Zulily website, although this was partially offset by a 9 percent higher average sale price. In the preceding fourth quarter ended December 22, the company also saw sales decline 28 percent to $254 million, largely due to lower unit volumes. The department has cut jobs over the past year and also closed its Pennsylvania fulfillment center in Bethlehem. In the third quarter ended September 30, sales declined 39 percent to $200 million. CEO David Rawlinson said at the time Zulily signed “a couple hundred new brands of various kinds, including 15 to 20 national brands” to increase conversion and sales. Still, the losses piled up.
Originally a flash sale site, Zulily has struggled for a while — even after it was acquired by home shopping platform QVC for $2.4 billion in 2015. QVC’s parent company, Liberty Interactive Corp. was renamed Qurate Retail in 2018.
Terry Boyle, a former Nordstrom executive and e-commerce veteran, was named President and CEO of Zulily in March 2022. He is expected to continue leading the Zulily management team.
“We are excited to be working with the Zulily team to help the company return to its entrepreneurial roots as an independent company,” said Michael Reinstein, Chairman of Regent. “Zulily was a pioneer 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 into new markets.”
Regent is no stranger to fashion. In March, the company acquired women’s clothing chain Intermix from Altamont Capital Partners. The company also includes Club Monaco (acquired by Ralph Lauren Corp. in 2021), La Senza (acquired by former Victoria’s Secret parent company, then known as L Brands, in 2018) and Escada (acquired by Megha Mittal in 2019). ) to the brands in his portfolio.
Qurate has repaid approximately $80 million of Zulily’s outstanding loans. The brand will no longer be a co-borrower on QVC Inc.’s bank credit facility.
https://sourcingjournal.com/topics/retail/qurate-retail-zulily-dtc-intermix-club-monaco-la-senza-escada-acquisitions-436798/ QVC owner divests money-losing mom-and-baby Zulily email site – Sourcing Journal