QVC buys struggling online retailer for $2.4 billion
Englewood, Colo. – Home shopping retailer QVC is expanding its omnichannel reach. QVC parent company Liberty Interactive Corp. is purchasing struggling online retailer Zulily Inc. for $2.4 billion in cash and stock.
Under the definitive agreement, QVC will acquire all outstanding shares of Zulily for $18.75 per share. QVC and Zulily will continue to operate as separate brands, with Zulily remaining at its Seattle headquarters. Darrell Cavens will remain president and CEO of Zulily, while Zulily cofounder Mark Vadon will join the Liberty Interactive board of directors.
According to the official QVC announcement of the deal, the collaboration will leverage QVC's global scale, curation, vendor relationships and video commerce expertise at Zulily. Meanwhile, QVC seeks advantage from Zulily’s younger customer demographic, personalization expertise and e-commerce capabilities.
Zulily reported a more than 50% drop in year-over year profitability in the second quarter of fiscal 2015 and has also seen its sales growth substantially decrease in recent quarters. The retailer recently named a new CFO and launched its first-ever major site redesign. In addition, Chinese e-commerce giant Alibaba bought a 9.3% stake in Zulily in May 2015.
"We are excited for Zulily to join the Liberty family," said Greg Maffei, Liberty Interactive president and CEO. "Zulily has built an impressive business around entertainment, discovery and value to the customer, which fits perfectly with the QVC philosophy. Combined under Liberty, we have an incredible opportunity to delight shoppers from the TV to the Internet."
The transaction has been approved by the boards of directors of both companies and is anticipated to close during fourth quarter 2015. In connection with the transaction, QVC president and CEO Mike George is being appointed to the executive committee of the Liberty Interactive board of directors. Cavens will report directly to George and the other members of the executive committee.