Zulily ceases sales, enters liquidation agreement
The final sale has concluded at Zulily, and wind-down of operations is underway.
In a note on its home page, the digitally native specialty apaprel retailer said that it has entered into an assignment for the benefit of creditors, or ABC. Serving as an alternative to Chapter 11 bankruptcy, the ABC hands management of Zulily’s liquidation of its assets to Douglas Wilson Companies, a California-based specialized business, workout and real estate services firm.
"Zulily was once valued at nearly $9B in the public markets, after which it changed hands multiple times at lower valuations as growth slowed and eventually began a prolonged
decline," said Janine Stichter, BTIG managing director, and consumer retail and lifestyle brands analyst, in a research note. "The company is emblematic of the many formerly high-growth e-com players that have struggled as online pricing competition has intensified severely,
especially from companies like Amazon."
Under the assigement, Douglas Wilson Companies will manage the wind-down of Zulily’s business and liquidate the company’s assets over the next 12 to 18 months for the benefit of its creditors. DWC will perform the services through a special purpose entity called Zulily ABC LLC.
Prior to entering the ABC, Zulily says it attempted to fulfill all pending orders and anticipates a “vast majority” of those will be fulfilled by Friday, Jan. 5, 2024. For orders that could not be fulfilled, Zulily says it made efforts to ensure those orders were cancelled and refunded.
Zulily’s claims agent, Omni Agent Solutions, will handle customer orders placed before entrance into the ABC that are not fulfilled or refunded by Monday, Jan. 22, 2024.
“Our goal is to effectuate a swift and efficient process that maximizes value to Zulily’s creditors,” said Ryan C. Baker, VP, Douglas Wilson Companies. “We have assembled an experienced team to assist in the management of claims and proactively address questions and concerns from Zulily’s customers and creditors. We recognize the strain processes such as these place on parties of interest and are committed to responsiveness and reliability as we fulfill our fiduciary responsibilities as assignee.”
Zulily shuts down – a timeline
Zulily initially announced it was going out of business with a notice of a final sale on its homepage Monday, Dec. 11, 2023. The going-out-of-business sale came not long after Qurate Retail Group, which is made up of QVC, HSN, Ballard Designs, Frontgate, Garnet Hill and Grandin Road, sold Zulily to Los Angeles-based investment firm Regent for an undisclosed sum in late May 2023.
According to the Seattle Times, Zulily laid off more than 800 workers, including close to 300 in its Seattle headquarters, over the weekend preceding the final sale announcement. In addition, GeekWire reported that the company would shutter its corporate office in Seattle, as well as distribution facilities in McCarran, Nev. and Lockbourne, Ohio, with more than 500 employees from the two sites facing layoffs.
Since being purchased by Regent in May 2023, Zulily has also laid off other employees, moved its corporate headquarters to a smaller building, and seen former CEO Terry Boyle depart. GeekWire also reports the company is facing at least two lawsuits over unpaid invoices from service providers and has received complaints from product vendors about not being paid for goods provided.
Prior to the Regent sale, Zulily shifted its focus from flash sales to virtual branded stores, everyday value, and exclusive daily deals in September 2022.