In its continuing quest for younger shoppers, QVC is paying $2.4 billion for Zulily, the millennial-mom-oriented flash site cofounded by former Blue Nile chairman Mark Vadon.
The purchase price amounts to $18.75 a share, about 15 percent below Zulily’s November 2013 IPO price of $22 a share. The company’s stock has sunk as much as 50 percent since going public, even as its revenue reached $1 billion in 2014, five years after its founding.
The two brands compliment each other, said a joint statement: Zulily can leverage QVC’s global scale, curation, vendor relations, and video experience; QVC likes Zulily’s younger demo, personalization expertise, and e-commerce know-how.
Even before this acquisition, Zulily brass often linked the two businesses: In 2013, president and CEO (and Blue Nile veteran) Darrell Cavens dubbed it “the web’s QVC.”
“QVC is very much about discovery-based shopping,” Cavens told The Wall Street Journal. “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. 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.”
Greg Maffei, president and CEO of QVC parent company Liberty Interactive, made a similar connection on CNBC today: “Zulily really is the QVC of the Internet for a younger generation.”
The companies will be operated as separate consumer-facing brands. Zulily will remain headquartered in Seattle and continue to be run by its current management team, including Cavens.
Vadon, now Zulily chairman, owned 35 percent of the company when it went public, likely making him a billionaire, according to Forbes. He will join the Liberty Interactive board of directors.