Dive Brief:
- Qurate has chosen the former head of Nordstrom's Trunk Club as the next CEO and president of its struggling Zulily e-commerce unit, which has suffered losses and sales declines over the past year.
- Terry Boyle took over as president of Trunk Club in 2017 after the departure of the apparel subscription service's founder. There, he "led the strategic reorientation of that business and returned it to high growth," according to Qurate's announcement of Boyle's hire.
- Prior to that, Boyle held executive positions at HauteLook, which Nordstrom acquired in 2011. He left Nordstrom in 2019, according to his LinkedIn profile, and founded e-commerce personal styling platform Behold. The site was not active at the time of publishing.
Dive Insight:
As head of Zulily, Boyle will report to Qurate CEO David Rawlinson. In the release, Rawlinson praised Boyle's "fresh perspective and leadership as the company looks to return to growth and refines its delivery of compelling, personalized digital experiences for Zulily's customers."
Zulily, launched in 2010, sells a range of products online, including apparel, toys, and home and garden products. The site, according to the company, depends heavily on flash sales to drive customer interest.
After growth in 2020, Zulily's revenue fell last year by over 11% to a little under $1.5 billion, while Qurate as a whole — which includes the QVC television retail channel — saw its revenue fall 0.9%.
Zulily's operating losses increased significantly year over year, to $469 million, after the unit took a write-down of $363 million. The impairment charge came as Zulily's business "deteriorated significantly" in the back half of 2021.
"Zulily initiated a process to evaluate its current business model and long-term business strategy in light of its challenges within the retail environment," Qurate said. "Additionally, Zulily management has seen turnover and is undergoing a change at the Chief Executive Officer position."
In February, Rawlinson listed a long set of troubles for Zulily. "Product scarcity impacted our ability to generate demand," Rawlinson said, according to a Seeking Alpha transcript. "National brands, which comprise approximately one-third of Zulily's sales, declined 30% in the quarter."
Rawlinson added that, "Increased supply chain costs forced Zulily to reduce marketing spend and raise prices," and also noted that "marketing inefficiencies" from changes in Apple's iOS operating system increased marketing costs. "All these factors led to a 37% decline in traffic in Q4."
As it tries to revive the unit, the chief said then that it was "refocusing around moms who make purchasing decisions for their households." Doing that will require improving the experience and providing "great fresh product finds" coupled with "intense cost management," according to Rawlinson.
"This business will have to shrink to grow, getting control over its unit economics, reestablishing a core value proposition that once again resonates with our core customer, and reinvigorating the top line around this new base," he said.
Given all that, Boyle ought to have plenty to work on once starting at Zulily. But it won't be the first time he's taken over at a struggling online brand. The year before he took on the lead role at Trunk Club, Nordstrom had given the then-unprofitable unit a nearly $200 million write-down.
