SEATTLE — Seattle-based Zulily, a one-time challenger to Amazon that was briefly worth $7 billion, is dramatically cutting its operations and staff in Seattle, according to media reports and state filings.
Zulily will lay off 292 workers in Seattle and elsewhere in Washington effective Feb. 7, according to a notification Thursday evening from the state Employment Security Department.
The 13-year-old company, which sponsored the Seattle Sounders from 2019 to 2022, is also closing its Belltown headquarters and several other facilities in other states, according to GeekWire. That includes shutting warehouses in Nevada and Ohio, which will result in another 547 layoffs, according to notices from both states.
Thursday’s cuts follow several earlier rounds of layoffs at Zulily as well as the October resignation of its CEO. They come barely eight months after the struggling online retailer was purchased by Regent, a Los Angeles-based private equity firm, from Qurate Retail, which had bought Zulily in 2015.
The Seattle Times could not reach either Zulily or Regent on Friday; Zulily’s media contact webpage is blank, and Regent’s website lacks contact information.
Within the tech sector, Zulily’s apparent collapse likely came as no surprise.
“To be honest, this has been a long time coming,” said Albert Squier, who runs technology recruitment for Seattle-based Fuel Talent. Like many in the Seattle-area tech world, Squier watched Zulily hit an early peak a decade ago only to quickly sink in an online retail industry that came to be ruled by heavyweights like Amazon and Walmart.
“The world of e-commerce has continued to solidify into the big players, (especially) with the way Amazon has continued to scale,” Squiers said.
That world seemed far more open to newcomers back in 2010, when Zulily was launched by Mark Vadon and Darrell Cavens, former executives with online jewelry retailer Blue Nile.
Their startup, which initially focused on children’s apparel, was essentially an online platform that artfully marketed other vendors’ products through thousands of multiday “flash” sales each year. Purchases were then shipped to customers either from Zulily’s fulfillment centers or directly from vendors as so-called drop shipments.
Eventually, Zulily expanded to include adult clothing, shoes and household goods.
Success came quickly and massively. In 2013, Zulily had 12.6 million active customers drawn by its carefully curated and lovingly photographed products, and made $331 million in revenue, up nearly 700 percent from 2010, according to media accounts.
That year, Zulily went public in an IPO originally valued at $2.6 billion — but by the end of the first day, that figure almost doubled, as the Times reported.
Zulily used that success to fuel further growth, including by recruiting top tech talent from rivals like Amazon. For new hires, “they were the hot tech company of the day when there weren’t many ‘unicorns’ in Seattle,” said Squier, using a term that refers to privately held tech startups that reach valuations of $1 billion or more.
By 2014, Zulily had a market value of $7 billion on annual sales of $1 billion. “Only Amazon and Old Navy hit the billion-dollar revenue mark in a shorter amount of time,” Fast Company magazine observed at the time.
But Zulily’s meteoric rise quickly began to cool.
Sales growth slowed in 2015 and share price plunged, in part as customers tired of Zulily’s relentless flood of deals and slower-than-Amazon delivery times.
Later that year, Zulily was purchased by Liberty Interactive-QVC, later renamed Qurate, for a reported $2.4 billion, or around 75 percent below its peak market value.
Qurate lifted Ziluly’s performance for a time — but by 2019, revenues were falling again, leading to an undisclosed number of layoffs.
One potential factor: Around 2019, Zulily was reportedly hurt after Amazon allegedly pressured merchants to raise the prices they charged on the Zulily platform, according to a recent lawsuit against Amazon by the Federal Trade Commission.
Since then, Zuily’s revenues have continued to decline, as has its head count. In mid-2022, Zulily’s Seattle workforce numbered around 900, according to GeekWire, but it was further cut after Regent bought Zulily for an undisclosed sum in May 2023. As of Friday, the company’s LinkedIn page listed 551 employees in the greater Seattle area and 1,626 nationally.
In August, Zulily traded its large Belltown headquarters for smaller digs in Pioneer Square. In October, Zulily CEO Terry Boyle, a former Nordstrom executive, stepped down after less than two years in the role.
There were other signs of a faltering company. Zulily was recently sued by vendors over claims of unpaid invoices and has faced complaints of nonpayment by vendors, according to GeekWire.
What’s next for Zulily isn’t certain.
Thursday’s cuts represent around half of Zulily’s workforce nationally and in Washington, according to employee numbers on the company’s LinkedIn page, although it’s not clear how current those numbers are or whether they reflect several earlier layoffs this year.
The Zulily website appears to be up and running, but it’s unclear how quickly orders are being fulfilled.
More broadly, after nearly a decade of slow decline, it’s not clear how relevant the Zulily brand remains.
That fading relevance will be especially painful for those who worked at Zulily — those who were just let go, but also those who knew the company in its younger, more promising years.