Online retailer Zulily shutting down its operations to liquidate assets was a surprise to many. Zulily’s shutting down led to the layoffs of numerous employees after attempts to turn the business around fell short.
Founded in 2010 by Mark Vadon and Darrell Cavens in Seattle, the platform has attracted millions of daily visitors looking for unique finds for clothing, home decor, toys, and gifts, all at discounted prices, it announced on its website that it’s working to fulfill all current orders and aims to complete this within the next two weeks. For orders that can’t be fulfilled, Zulily is focused on providing refunds. They’ve also provided a contact for customers who haven’t received their orders or refunds yet.
Key Takeaways
- Closure and Job Losses: Zulily, a once-prominent online retailer, is shutting down its operations. This decision has led to the loss of over 800 jobs across three states: 292 in Seattle, 273 in Nevada, and 274 at its fulfillment center in Lockbourne.
- Asset Liquidation: The company is in the process of selling off its remaining stock to settle its debts. Douglas Wilson Cos., a San Diego-based firm, will oversee the liquidation process to maximize returns for Zulily’s creditors.
- Legal Action Against Amazon: Zulily has filed a lawsuit against Amazon, accusing the tech giant of unfair business practices. Specifically, Zulily alleges that Amazon pressured suppliers to offer less favorable terms to Zulily, thereby undermining its ability to compete effectively.
- Community Impact: Zulily, which was once a significant presence in Seattle’s tech community, has faced challenges in recent years. The closure impacts employees and creditors and raises questions about the future of smaller e-commerce platforms in a market dominated by giants like Amazon.
Image source: Zulily
Zulily Shutting Down, Causing Over 800 Job Cuts
Zulily, the online retail platform, has announced its closure, surprising both its customers and employees. Based in Seattle, the company stated on its website that it’s working to fulfill existing orders and aims to address any outstanding issues, including refunds, on January 22. They’ve also provided a contact for customers with concerns about their orders or refunds.
Once a standout in e-commerce, Zulily is now in the process of selling off its stock to settle debts as it prepares to close its doors. The company began winding down its operations recently after a 13-year stint that once captivated the tech world. However, it struggled to keep up with giants like Amazon and other online shopping platforms. Just before announcing its final sale, Zulily let go of over 800 staff members, with 292 positions in Seattle, 273 in Nevada, and another 274 jobs at its fulfillment center in Lockbourne.
In a statement on its website, Zulily confirmed it’s moving forward with a structured closure. The company has initiated an Assignment for the Benefit of Creditors (ABC), handing over the liquidation process to a third-party trustee. Douglas Wilson Cos., a firm from San Diego, will oversee the winding down and sale of Zulily’s assets, aiming to get the best outcomes for the company’s creditors. It’s worth noting that Douglas Wilson Companies is overseeing the process for Zulily.
Ryan C. Baker, Douglas Wilson Companies’ vice president, emphasized that choosing to wind down Zulily wasn’t taken lightly. Due to the tough business competition, Zulily faced and its financial challenges, immediate action was deemed necessary.
In another statement, Ryan highlighted their aim to handle the Zulily situation efficiently while ensuring the best outcomes for the company’s creditors. Baker mentioned that they’ve assembled a skilled team to manage claims and promptly respond to any queries or worries from both Zulily’s customers and creditors. Understanding the challenges these situations bring, they’re dedicated to being responsive and dependable in their role as the Assignee.
Once a notable presence in Seattle’s tech community, Zulily even sponsored the Seattle Sounders in 2019. Lately, the company gained attention for its vigorous advertising on social media.
Zulily’s move toward liquidation resulted in numerous job cuts across various states this past year. In a significant development last May, Regent, a private equity firm, acquired Zulily from its previous owner, Qurate Retail Group, known for QVC and HSN. This acquisition led to Zulily being separated from QVC, Inc.’s financial arrangements, with an outstanding debt of around $80 million settled by Qurate Retail at the time of sale.
Image source: Qurate Retail Group
Is Amazon The Reason Behind Zulily’s Shutdown?
Zulily’s closure follows the recent shutdown of Jane.com. Both struggled to compete with well-funded rivals like Amazon, Shein, and Temu. Just this month, Zulily filed a lawsuit against Amazon, alleging unfair business practices.
Ryan pointed out that the situation unfolded because Zulily had few options left.
Zulily has filed a lawsuit against Amazon, claiming the e-commerce giant used unfair tactics to undermine its business. Specifically, Zulily alleges that Amazon pushed sellers away from Zulily and restricted Zulily’s ability to offer competitive prices. These claims align with the FTC’s broader antitrust lawsuit against Amazon earlier.
The lawsuit alleges that Zulily’s suppliers felt pressured by Amazon’s pricing demands. Suppliers had to raise Zulily’s prices to match Amazon’s rates or stop doing business with Zulily altogether. Within just a year, about half of the suppliers selling on Amazon and Zulily chose to end their association with Zulily due to this pressure.
Zulily argues that its business model is straightforward – it buys products wholesale and sells them to consumers without extra charges. In contrast, Amazon operates a marketplace where retailers sell directly to consumers and pay additional fees for using the platform.
Amazon has refuted these claims from both Zulily and the FTC.
Wilson, from the legal firm handling the case, mentioned they’re reviewing the lawsuit and are committed to keeping it active. He emphasized that dropping the lawsuit isn’t on the table right now.
When Did Things Start To Tumble For Zulily?
Founded in 2010 by Mark Vadon and Darrell Cavens, who previously worked at the online jewelry store Blue Nile, Zulily saw rapid growth. By 2013, the company had attracted 12.6 million active customers and generated $331 million in revenue, a staggering increase of nearly 700% since its inception.
The company went public in 2013 with an initial valuation of $2.6 billion. By 2014, Zulily’s market worth climbed to $7 billion, backed by annual sales of $1 billion. Zulily expanded its workforce at the Nevada location, reaching around 1,000 employees, with plans to add another 600. That same year, the company revealed intentions to launch a new distribution center in Bethlehem, Pennsylvania.
Zulily’s growth momentum began to slow, and In a significant move in 2015, Liberty Interactive-QVC, later known as Qurate, acquired Zulily for an estimated $2.4 billion. Over time, challenges persisted, leading to the closure of its Pennsylvania facility and the unfortunate layoffs of approximately 500 employees in 2022.
Fast forward to 2023, the ownership of Zulily shifted to Regent, a private equity firm.
So, How Can You Reach The Team For Any Refunds Or Your Orders?
Zulily has established a dedicated team to assist customers, vendors, and other concerned parties. You can reach the Zulily ABC hotline at 8882025829, or for international callers, dial (+1) 7472886406. For more details and support, visit https://omniagentsolutions.com/ZulilyABC.
Image source: Omni
Customers can email [email protected], while vendors and other interested parties can reach out to [email protected].
Conclusion
Zulily’s decision to cease operations and liquidate assets underscores mid-sized e-commerce platforms’ challenges in a fiercely competitive market dominated by giants like Amazon. Founded with promise and rapid growth, Zulily’s journey reflects the volatile nature of the online retail landscape.
The closure, affecting over 800 employees and countless customers, also highlights the ripple effects of such business decisions on communities and stakeholders. As the company navigates its liquidation process and legal battles, it is a cautionary tale about the complexities and uncertainties inherent in the e-commerce sector. For those impacted, Zulily has provided dedicated channels for support and inquiries, aiming to mitigate the fallout from its closure.
