Online retailer Zulily saw revenue fall by 20% in the most recent quarter due to fewer new customers and supply chain issues caused by COVID-19.
QVC parent Qurate, which acquired Seattle-based Zulily in 2015, reported its first quarter financials Wednesday. Zulily’s revenue dipped to $316 million, down from $397 million, with an operating loss of $20 million, up from $13 million in the year-ago quarter. Gross margins also decreased due to lower product margins and increased fulfillment costs.
“Zulily revenue declined primarily due to lower unit volume driven by a decrease in new customers, as well as an unfavorable supply chain impact from COVID-19,” Qurate reported. “Zulily’s results were also negatively affected by less efficient customer acquisition spend on certain digital marketing channels.”
Quarate’s total revenue decreased 5% to $2.9 billion.
“We experienced significant margin impact from COVID-19 in the first quarter and challenges remain, including a demand shift to lower-margin products and reduced productivity in our fulfillment centers,” Qurate CEO Mike George said in a statement.
Some e-commerce companies such as Amazon are seeing a surge in orders due to the global pandemic, with physical stores closed and shelter-in-place mandates in place across the world.
A survey of transactions from Avalara showed that customers are now spending more on survival supplies and products to fill the time at home. But items that are no longer as necessary for everyday life, like shoes, jewelry, formal wear, and adventure gear are seeing decreased spend.
Tech industry vets Darrell Cavens and Mark Vadon launched Zulily in 2009 and found success with a daily deals site selling products for moms and kids. But the company has expanded its product selection over the past few years, including items from larger national brands, for example.
The company went through a restructuring and layoffs in July 2019.
Jeff Yurcisin, a former Amazon executive and Shopbop CEO, took over as CEO in 2018 after Cavens stepped down from the role.
