Liberty Interactive Corps, which owns QVC shopping channel, will acquire flash-sales site Zulily Inc. for $2.4 billion in cash and stock, the companies announced Monday.
The price reflects a 49% premium to Zulily’s share price ($12.57 end of day Friday).
Zulily went public in November 2013, and remains one of the only flash sale sites to do so. Its shares rose to a $7 billion market cap in February 2014, only to plummet soon after.
Zulily had been a darling of the flash-sales retail space, until sales began to sputter as the model fell out of favor in recent months. The retailer also has had growing pains as it moved from being a quirky site with a limited amount of merchandise for women and kids to one attempting to appeal to a wider customer base. The retailer’s method of not keeping its inventory on hand until it has sold has also hampered logistics — in an era when many shoppers expect their orders within a week and sometimes even on the same day, Zulily customers often wait weeks for theirs to arrive, and the company accepts returns only on a limited basis.
But this could be a good fit — especially since Liberty and QVC are likely to make changes. CEO Darrell Cavens has already favorably compared Zulily to QVC, telling the Wall Street Journal last year: “QVC is very much about discovery-based shopping. If you're out there and you've got something in mind, it's highly unlikely you'll turn on QVC and wait seven hours for that to come on,” Cavens said. “So it's very similar to Zulily. If there is a product your daughter absolutely loves, it's likely we're not going to have it today. Customers coming to our site don't know what they are going to get.”
The question for Zulily is how much change is needed to recapture its sunny prospects, and whether the spirit of the brand can hold up for its biggest fans if it changes a lot.