What Happened to Zulily? The Untold Story Behind the Shutdown (2025)
- kmrshubham809
- Mar 14
- 5 min read
Zulily's downfall stands as one of the most dramatic collapses in e-commerce history. The marketplace's value plummeted from a staggering $9 billion valuation in 2013 to a mere $4.5 million sale in 2023. This shocking decline rattled the entire industry.
The e-commerce giant struggled against fierce competition from Shein and Temu and ended up announcing its shutdown as losses mounted and layoffs increased.
The Rise of Zulily's E-commerce Empire
Zulily made its grand entrance into e-commerce in January 2010, focusing exclusively on children's apparel. Mark Vadon and Darrell Cavens, both former Blue Nile executives, spotted a golden opportunity between big box retailers and boutique stores.
Their fresh take on flash sales worked wonders. The company launched over 100 daily deals that lasted 72 hours or less. This strategy turned into a soaring win - revenue jumped from $143 million in 2011 to $331 million in 2012. The customer base grew impressively too, with active users almost doubling to 1.58 million in 2012.
Morning sales events on Zulily became the talk of the town by 2012. Dedicated shoppers even set their alarms for 6 a.m. to grab new products, and many items disappeared from virtual shelves by lunchtime. The platform stood out against retail giants like Amazon and Nordstrom by connecting smaller vendors with a massive audience.
Technology played a significant role in Zulily's rise to success. Their system delivered 10 million individual-specific emails within 15 minutes each morning. The company's content team also ran regular photoshoots at headquarters, creating a unified catalog look that really appealed to shoppers.
The company attracted more than $130 million from big-name investors like Andreessen Horowitz and Maveron. This is a big deal as it means that Zulily's 2013 IPO surpassed expectations. The stock opened at $39, up from its original price of $22, which valued the company at $4 billion. Zulily's value topped other Seattle tech companies' IPOs, including Tableau Software ($3.8 billion) and Zillow ($2.9 billion).
Zulily's numbers told an impressive story by 2013. The company worked with over 10,000 brands, showcased 1.6 million product styles, and sold more than 42 million items to 2.9 million customers. These results verified the flash sales model worked perfectly, especially when you have mothers as your target market - U.S. Census Bureau data showed 39 million households with children under 18.
Critical Business Decisions That Led to Decline
QVC's parent company Liberty Interactive bought Zulily for $2.4 billion in 2015, which started the company's downward spiral. The original excitement about cultural fit and synergies quickly faded as basic differences surfaced between how the two companies approached business and their target customers.
QVC had built its business around older TV shoppers. Zulily, on the other hand, focused on tech-savvy young moms. This customer base mismatch made it hard to sell across platforms. The different views on growth strategy between management teams created internal conflicts, which led to flat revenue and customer numbers in the two years after the purchase.
A major change happened as Zulily stopped focusing on moms and tried to become a general marketplace for "women or men, with or without kids". This new strategy got pricey as the company lost what made it special and unique. The expansion also put Zulily up against Amazon - a battle it couldn't win.
Things got worse after Amazon challenged Zulily's "Best Price Promise" program. Amazon's competitive pressure forced Zulily to stop its comparison-shopping feature and pull back expansion plans beyond its main products. This retreat substantially affected the company's growth path.
Day-to-day problems made everything harder. Zulily's revenue dropped 17% to $192 million before Qurate sold it to Regent. The company faced several issues:
National brands became less available
Online marketing costs went up
Marketing campaigns stopped working as well
Customer needs had changed drastically since Zulily's early days. Fast shipping became essential rather than just nice to have. Zulily couldn't keep up with Amazon Prime's delivery speed, which pushed it further behind in the market.
By 2022, Zulily's sales had dropped to $906 million, far below its best year of $1.8 billion in 2018 under Qurate. The company's failure to deliver reliable shipping speeds, clear pricing, and new features ended up causing its collapse.
The Final Months Before Shutdown
Zulily faced a major shift when private equity firm Regent acquired it from Qurate Retail in May 2023. The excitement about this new ownership didn't last long as financial problems piled up and CEO Terry Boyle stepped down in October 2023.
Things got worse under Regent's leadership. Vendors started reporting unpaid bills worth thousands. Fire Mountain Spices waited for their $15,000 payment, and Flags Galore Decor and More was owed $24,000. Euro Brandz, who had worked with Zulily for nine years, got an offer to settle their $10,000 debt for just a third of what they were owed.
Zulily announced it would shut down completely in December 2023. The company chose to make an Assignment for the Benefit of Creditors rather than file for bankruptcy. This choice led to massive job cuts affecting more than 800 workers in three states:
292 jobs eliminated in Seattle
273 positions cut in McCarran, Nevada
274 roles terminated in Lockbourne, Ohio
The company's last move was to sue Amazon, claiming their anti-competitive behavior forced almost half of Zulily's suppliers to cut ties within just one year. In spite of that, this legal fight proved pointless as the company moved ahead with its "going-out-of-business" sale.
Beyond Inc., which owns Bed Bath & Beyond and Overstock, bought Zulily's remaining assets for $4.5 million in February 2024. The deal included:
Website and domain names
Trademarks
Customer database
Social media accounts
Software systems
Former Zulily employees have filed a class-action lawsuit against Regent. They claim the company broke the Worker Adjustment and Retraining Notification Act. Remote workers, who were still linked to physical locations, didn't get their required 60-day notice or compensation.
Conclusion
Zulily's story shows how even companies worth billions can fail. The company broke new ground with flash sales targeting moms, but poor decisions after QVC bought them proved disastrous.
Amazon's fierce competition, market challenges, and operational problems ended up sealing Zulily's doom. Their journey from a thriving marketplace revolutionized into a warning sign for other e-commerce businesses.
FAQs
Q1. What led to Zulily's downfall?Â
Zulily's decline was due to several factors, including fierce competition from Amazon and newer e-commerce platforms, loss of brand identity after expanding beyond its core market of moms, challenges with supply chain and product availability, and difficulty adapting to changing customer expectations for fast shipping.
Q2. How did Zulily's acquisition by QVC impact the company?Â
The 2015 acquisition by QVC's parent company marked the beginning of Zulily's decline. Misalignment between the two companies' target demographics and business approaches led to stagnant revenue and customer numbers, ultimately contributing to Zulily's downfall.
Q3. What happened to Zulily's inventory after the shutdown?Â
Following Zulily's closure in December 2023, the company's remaining inventory, valued at approximately $85 million, along with warehouse equipment, entered a liquidation process to maximize value for creditors.
Q4. Who acquired Zulily's assets after the shutdown?Â
In February 2024, Beyond Inc., the parent company of Bed Bath & Beyond and Overstock, purchased Zulily's remaining assets for $4.5 million. This included the website, domain names, trademarks, customer database, and software systems.
Q5. What alternatives are available for former Zulily shoppers?Â
Former Zulily customers can explore similar flash-sale sites and online retailers such as Jane.com, known for boutique deals and daily discounts, Gilt for luxury brand flash sales, and Rue La La for discounts on fashion and home decor.