Zulily is hosting a sale with heavy discounts on all items. If you have been on their website, then you might be wondering: Is Zulily going out of business?
It is no news that Zulily has been struggling financially for a very long time now, but what exactly happened to the company, which once had a value of $7 Billion?
Read this guide till the end as we discuss the lifespan of Zulily and reveal to you the sad reality of this company.
Zulily Over The Years
Zulily was founded in 2009 by Mark Vadon and Darrell Caven, the former executives of an online jewelry brand, Blue Nile.
Shortly after its launch, Zulily opened its first fulfillment center in Northern Nevada in 2011 with 400 employees. And the next year, it opened another fulfillment center in Ohio.
The company used to sell only kids and maternity wear items at that time. But soon, it started expanding its customer base and started competing with Amazon.
By 2013, Zulily had a value of $2.6 billion and a global customer base of 12.6 million.
Then, in 2014, the company started adding more staff to its Northern Nevada facility. It added 1000 new employees and 600 staff members that year. In the same year, it opened another distribution center in Bethlehem, Pennsylvania.
However, 2015 marked the downfall of Zulily, and things only got worse after that. So in 2015, Zulily’s revenue started declining rapidly, shortly after which the company was purchased by Liberty Interactive-QVC for $2.4 billion.
However, the struggle didn’t end there, and the company had to lay off 500 employees and even close its Pennsylvania facility.
In 2023, Zulily was eventually sold to Regent, a Los Angeles-based private equity firm.
Zulily Lays Off 800 Employees
Zulily has laid off 800 people in three states, including Washington, Nevada, and Ohio. The layoffs were supposed to include 292 jobs in Seattle, 273 in Nevada, and 274 people in Ohio.
Last week, Zulily’s employees received a letter from the company that they would lose their jobs in February.
However, many of them got the termination letter earlier notifying them that it was their last day in the company.
“We regret to inform you that based on business circumstances, we must move your Termination Date up,” the termination letter said.
“Last week’s [decision] was already shocking. Today’s is just infuriating,” said Benjamin Normoyle, a longtime engineer at the company.
Employees were locked out of their email IDs and account login shortly after receiving the termination letter. It is not clear as to how many employees have received the termination letter.
The company only mentioned that the health insurance plans for the terminated employees will cease effective December 31. There was no mention of any severance.
“As you know, on December 7, 2023, we gave you a notice informing you that your employment relationship with Zulily would end on February 7, 2024, or the 14-day period commencing on that date,” it reads. “We gave this notice voluntarily under the Worker Adjustment and Retraining Notification (WARN) Act even though you were not entitled to WARN notice because you are not employed at an affected site of employment as defined by the WARN Act.”
Is Zulily Going Out Of Business?
The Seattle-based online e-commerce platform Zulily has confirmed on its website that it is going out of business.
“All sales are final during Zulily’s going-out-of-business sale,” reads an FAQ page on Zulily’s website.
The statement was posted on the website in less than 48 hours after the company laid off 800 employees.
In addition to this, Zulily, filed a lawsuit against its long-term competitor, Amazon, for their policies that drove the merchants away.
In the lawsuit, Zulily accused Amazon of using anticompetitive business practices that punish merchants for selling their goods at lower prices on other platforms.
Amazon disputed these allegations by saying that it is following the same policies that other e-commerce businesses follow for displaying prices.
Why Is Zulily Going Out Of Business?
The biggest reason that contributed to the downfall of Zulily was competition from other e-commerce platforms, especially Amazon. The company believes Amazon and its unfair practices drove the merchants away from them.
Additionally, for a long time, Zulily was struggling to meet the expectations for shipping times. Customers also complained that Zulily was adding way too many items as it expanded from selling kids and maternity items to selling women’s and men’s clothing, home accessories, etc.
Zulily’s revenue was dropping continuously, and in the first quarter of this year, it saw a 17% decline to $192 million and an operating loss of $43 million.
In conclusion your concern about Is Zulily Going Out Of Business was right. The company that made $7 Billion during its peak is now shutting down joining the league of some other well known brands such as Morphe, Straight Talk, etc.
The decision has affected so many people. Hundreds of employees lost their jobs in a day, and loyal customers lost their favorite brands.
In retrospect, the company’s financial health indicated a long time ago that the fall was doomed to happen.
Is Zulily facing financial trouble?
Yes, the company has been seeing a constant decline in revenue for many years. In 2022, Zulily’s revenues tumbled 38% to $906 million- showing a decline of a whopping $1 million for the first time in all these years.
Who owns Zulily?
In 2014, Zulily was sold to QVC parent Qurate for $2.4 Billion, and in May 2023, Regent acquired the company.
Are Zulily and Amazon rivals?
Yes, Zulily and Amazon were long-term rivals. In fact, the popularity of Amazon is the biggest reason why Zulily went out of business.