The latest chapter in the meltdown of Zulily is reading like a bad holiday fairy tale.
The Seattle online retailer — battered after weeks of layoffs, website outages and management reversals — posted a message on its website saying that it has made “the difficult but necessary decision to conduct an orderly wind-down of the business to maximize value for the companies’ creditors.”
To help expedite that process, Zulily said Friday that it entered into an agreement with a third-party fiduciary operating under the name of Zulily ABC LLC, a subsidiary of a San Diego-based firm by the name of Douglas Wilson Companies that, among other things, specializes in receiverships and liquidating assets of troubled companies.
The so-called “assignment for the benefit of creditors” — also known as an ABC — is an alternative to a bankruptcy filing.
According to a FAQ provided by Douglas Wilson Companies, the goal of the process is to gather and sell assets and then distribute proceeds “in accordance with statutory priorities.” The process usually takes 12 to 18 months.
The new Zulily ABC entity is no longer accepting orders from customers through the Zulily website, and refunds to existing customers are unable to be processed at this time. For customers owed money by Zulily — either refunds or holders of gift cards — they are required to fill out a proof of claim form if they want a chance to receive money back. The deadline to file a claim is June 14.
“Zulily customers have always been the heart of the business and their support over the years is greatly appreciated,” the FAQ states. “Zulily regrets any inconvenience as a result of this process.”
A separate vendor FAQ notes that “we are working diligently to fulfill our obligations to vendors and regret any inconveniences this process may cause.”
The transfer of ownership to a new entity that specializes in company closures marks an official end of the line for a high-flying online retailer that was valued at $4 billion following its IPO ten years ago.
The retailer’s business deteriorated following its market debut, and after a series of financial misses the company sold to QVC parent Qurate for $2.4 billion in 2015.
The company advertised heavily to gain new customers under its new owner, including TV spots that declared it was a “shopping paradise with deals on every scroll.” In 2019, it inked an elaborate multi-year sponsorship of the Seattle Sounders FC, which included Zulily’s brand emblazoned on front of the Major League Soccer team’s jerseys.
In May of this year, Los Angeles-based investment firm Regent acquired Zulily, saying at the time that it planned to grow the company in new markets. But things quickly spiraled during Regent’s seven months at the helm.
In one of the stranger twists, Regent told Zulily employees on Dec. 7 that it would begin job cuts on Feb. 7. It also submitted filings with state employment officials, stating that the company would lay off more than 800 people and close warehouses in Nevada and Ohio as well as its headquarters in Seattle beginning Feb. 7.
But a few days later, the company reversed course and told many of the impacted employees that due to “business circumstances” they’d be laid off in December.
Regent has declined repeated requests for comment.
“Our goal is to effectuate a swift and efficient process that maximizes value to Zulily’s creditors,” Ryan C. Baker, vice president at Douglas Wilson Companies, said in a statement. “We have assembled an experienced team to assist in the management of claims and proactively address questions and concerns from Zulily’s customers and creditors. We recognize the strain processes such as these place on parties of interest and are committed to responsiveness and reliability as we fulfill our fiduciary responsibilities as Assignee.”
In an interview with GeekWire earlier this month, Zulily co-founder Mark Vadon — who left his day-to-day role at the company in 2014 — said that he felt bad “for the people who worked so hard to build something that I think was truly special.”
Jane.com, another online retailer that focused on women and children, also abruptly shut down this year and is working with a similar third-party company specializing in asset liquidation.
Here’s the full note posted on Zulily’s website:
Dear Zulily Friends and Partners,
As previously announced, Zulily, LLC and its parent Zulily Group LLC (collectively, “Zulily”) made the difficult but necessary decision to conduct an orderly wind-down of the business to maximize value for the companies’ creditors. This decision was not easy nor was it entered into lightly. However, given the challenging business environment in which Zulily operated, and the corresponding financial instability, Zulily decided to take immediate and swift action.
To effectuate the process, on December 22, 2023, Zulily entered into an Assignment for the Benefit of Creditors (“ABC”) whereby an assignee – Zulily ABC, LLC, a wholly owned subsidiary of Douglas Wilson Companies – will complete an orderly wind-down of the business to maximize the recovery for the companies’ creditors as a third-party fiduciary.
We realize that this news comes with many questions, and we have put a team in place to address customer, vendor, and other interested party inquiries. The Zulily ABC hotline can be reached at 888-202-5829 or (+1) 747-288-6406 outside the U.S., or visit https://omniagentsolutions.com/ZulilyABC for more information and additional support. In addition, customers can send email inquiries to ZulilyCustomersABC@OmniAgnt.com, while vendors and other parties of interest can email ZulilyABCInquiries@omniagnt.com.
We appreciate your patience as we move through this process as swiftly and efficiently as possible.
Sincerely,
Ryan C. Baker
Vice President
Douglas Wilson Companies
