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Zulily at its 2013 IPO. The stock sunk in 2014, and continues to fall in 2015.
Zulily at its 2013 IPO. The stock sunk in 2014, and continues to fall in 2015.

Seattle-based Zulily — one of the fastest growing online retailers — is being sold to Liberty Interactive’s QVC Group for $2.4 billion, a deal that comes five years after it was founded by former Blue Nile veterans Mark Vadon and Darrell Cavens and two years after a skyrocketing IPO.

Zulily CEO Darrell Cavens speaks at GeekWire Startup Day last year.
Zulily CEO Darrell Cavens speaks at GeekWire Startup Day last year.

The sale comes at a time when Zulily’s stock has sunk significantly, following a series of earnings misses. Even with the premium paid by QVC built-in, shares of Zulily are down 50 percent in the past year, and are off the all-time high of $68 per share set in February 2014.

A few days after its IPO, Zulily was valued at $4 billion.

Home shopping giant QVC is paying $18.75 per share for Zulily in a cash and stock transaction, a deal that marks a 49 percent premium over Zulily’s stock close last week. The deal also comes three months after Chinese retailing giant Alibaba disclosed a 9.3 percent stake in Zulily.

Zulily will remain in Seattle.

“As the world leader in video and eCommerce retail, QVC is dedicated to reimagining shopping, entertainment and community as one,” said Mike George, QVC President and CEO, in a statement. “In Zulily, we see a like-minded brand that shares our passion for discovering great products, for delivering honest value, and for building long term relationships with customers.”

Zulily posted revenue of $298 million during the second quarter, and said that it expects total sales of $1.3 billion to $1.4 billion for the year.

In a conference call with analysts, Liberty Interactive QVC’s Group said that they plan to test and learn how to leverage each others retailing platforms.

One possibility: Zulily on TV.

Using the power of QVC’s airwaves to sell Zulily products could open up new possibilities for the companies.

There’s very little overlap between QVC and Zulily, with just six percent of QVC’s customers shopping on Zulily. The brands sold via the two channels also are relatively different, said Zulily CEO Darrell Cavens.

zulily-qvc“As we looked at the overlap, and we have not meshed vendor lists yet, I candidly don’t think there is a lot of overlap there,” said Cavens in today’s analyst call. “The brands that we are out chasing at Zulily oftentimes don’t have distribution on QVC and candidly some of the brands we are chasing, that we haven’t been able to close yet, are on QVC. I think … there is a real synergistic nature where we can take these brands and these merchandising teams, both that are at scale, and kind of bring together an opportunity to source these different products and put them on the complimentary channels, be they Zulily or QVC.”

In addition to experimenting with Zulily on TV, Cavens said that they hope to learn from QVC’s “depth of experience” in areas such as the QVC easy-pay platform as well as product returns.

“I think there are a lot of programs (to learn from) that candidly comes from a business that is 30 years old as opposed to one that is five,” said Cavens. “I think we can take a lot of those lessons.”

Follow-up: Zulily founders to take home nearly half of the $2.4B from blockbuster sale to QVC

Here’s the full press release:

Englewood, CO, and Seattle, WA, August 17, 2015 – Liberty Interactive Corporation (“Liberty Interactive”) (Nasdaq: QVCA, QVCB, LVNTA, LVNTB) and zulily, inc. (“zulily”) (Nasdaq: ZU) today announced that they have entered into a definitive agreement (the “Agreement”) under which Liberty Interactive will acquire all outstanding shares of zulily for $18.75 per share. The acquisition will be attributed to Liberty Interactive’s QVC Group tracking stock.

“We are excited for zulily to join the Liberty family,” stated Greg Maffei, Liberty Interactive President and CEO. “Darrell, Mark and their team have 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.”

“As the world leader in video and eCommerce retail, QVC is dedicated to reimagining shopping, entertainment and community as one,” said Mike George, QVC President and CEO. “In zulily, we see a like-minded brand that shares our passion for discovering great products, for delivering honest value, and for building long term relationships with customers. Our teams are committed to learning from and inspiring each other and leveraging our platforms in new ways to accelerate growth, serve our customers better, and realize the full potential of both of these extraordinary brands.”

“Mark Vadon and I are incredibly excited to announce our partnership with QVC. QVC has built an amazing business with a great culture and incredibly similar understanding for bringing entertainment, discovery and value into the daily customer experience.” said Darrell Cavens, President and CEO of zulily. “This combination under Liberty is about investing in our future and providing a tremendous opportunity to accelerate our platform for growth of the zulily brand through the partnership with QVC.”

The proposed transaction will bring two highly complementary businesses under common ownership and further strengthen QVC’s leadership position in experiential, discovery driven shopping. While QVC and zulily will be operated as separate consumer facing brands, the collaboration creates numerous exciting opportunities, including leveraging QVC’s global scale, curation, vendor relationships and video commerce expertise at zulily. Similarly, zulily’s younger customer demographic, personalization expertise and eCommerce capabilities will boost QVC.

Following the close of the transaction, zulily will remain based in Seattle. zulily will continue to be run by its talented management team, with Darrell Cavens remaining President and CEO of zulily. In connection with the transaction, Mike George is being appointed to the Executive Committee of the Liberty Interactive Board of Directors and will serve on that committee with John Malone and Greg Maffei. Darrell Cavens will report directly to Mike George and the other members of the Executive Committee. In addition, zulily co-founder Mark Vadon will join the Liberty Interactive Board of Directors.

The deal values zulily at $2.4 billion. Liberty Interactive has agreed to provide $9.375 in cash and 0.3098 newly issued shares of QVCA for each zulily share. Funding for the cash portion of the consideration is expected to come from cash on hand at zulily and QVC’s revolving credit facility.

The transaction has been approved by the boards of directors of both companies and is anticipated to close during the fourth quarter of 2015. Pursuant to the Agreement, a subsidiary of Liberty Interactive will commence an exchange offer for 100% of the outstanding shares of zulily common stock for $18.75 per share. The exchange offer is required to be commenced within 15 business days of today and to remain open for at least 20 business days after launch. Concurrent with the execution of the Agreement, zulily’s founding shareholders, representing approximately 45% of zulily’s outstanding shares, have signed a Tender and Support Agreement, pursuant to which they have agreed to tender all of their shares into the exchange offer, subject to certain exceptions. Following successful completion of the exchange offer, any shares not acquired in the exchange offer will be acquired in a second-step merger at the same $18.75 per share deal price. Closing of the exchange offer is conditioned upon customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and there being validly tendered and not withdrawn a number of shares of zulily common stock equal to at least a majority of the total outstanding voting power. The offer is not subject to any financing condition.

Baker Botts L.L.P. is acting as legal advisor for Liberty Interactive. Goldman Sachs is serving as financial advisor for zulily and Weil, Gotshal & Manges LLP and Cooley LLP are acting as legal advisors.

Liberty Interactive’s President and CEO, Greg Maffei, QVC’s President and CEO, Mike George, zulily’s Chairman, Mark Vadon and zulily’s President and CEO, Darrell Cavens will co-host an investor conference call to discuss the transaction at 9am E.D.T. on Monday, August 17, 2015. The call can be accessed by dialing 844-307-2219 or 678-509-7635 at least 10 minutes prior to the start time. The call will also be broadcast live across the internet and archived on both Liberty Interactive’s and zulily’s websites. To access the webcast and the accompanying presentation materials go to either or An archive of the webcast will also be available on both websites for 30 days after appropriate filings have been made with the SEC.

About Liberty Interactive Corporation

Liberty Interactive Corporation operates and owns interests in a broad range of digital commerce businesses. Those businesses are currently attributed to two tracking stock groups: the QVC Group and the Liberty Ventures Group. The businesses and assets attributed to the QVC Group (Nasdaq: QVCA, QVCB) consist of Liberty Interactive’s subsidiary, QVC, Inc., and its interest in HSN, Inc., and the businesses and assets attributed to the Liberty Ventures Group (Nasdaq: LVNTA, LVNTB) consist of all of Liberty Interactive Corporation’s businesses and assets other than those attributed to the QVC Group, including its interest in Expedia, Interval Leisure Group and FTD, its subsidiaries, CommerceHub, LMC Right Start and Evite, and minority interests in Time Warner, Time Warner Cable and Lending Tree.

Liberty Interactive IR Contact: Courtnee Ulrich (720) 875-5420

About QVC

QVC, Inc., a wholly owned subsidiary of Liberty Interactive Corporation, is the world’s leading video and ecommerce retailer. QVC is committed to providing its customers with thousands of the most innovative and contemporary beauty, fashion, jewelry and home products. Its programming is distributed to approximately 340 million homes worldwide through operations in the U.S., Japan, Germany, United Kingdom, Italy, France and a joint venture in China. Based in West Chester, PA and founded in 1986, QVC has evolved from a TV shopping company to a leading ecommerce and mobile commerce retailer. The company’s website,, is ranked among the top general merchant Internet sites. QVC, Q, and the Q Ribbon Logo are registered service marks of ER Marks, Inc.

About zulily inc.
zulily ( is a retailer obsessed with bringing customers special finds every day-all at incredible prices. zulily features an always-fresh curated collection for the whole family, including clothing, shoes, home décor, toys, gifts and more. Unique products from up-and-coming brands are featured alongside favorites from top brands, giving customers something new to discover each morning. zulily was launched in 2010 and is headquartered in Seattle. zulily’s shares are traded on the NASDAQ Global Select Market under the symbol ZU.

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