Internet retailer that is the favorite of moms and fashionistas, Zulily, was just purchased by TV shopping network QVC for $2.4 billion. According to the Wall Street Journal, QVC’s parent, Liberty Interactive Corp., on Monday said it would pay the equivalent of $18.75 per Zulily share, representing a roughly 49% premium to Zulily’s closing price of $12.57 last Friday.
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That price has fallen quite a bit since Zulily went public in 2013 - about $22 a share. Still, there are still many people using the website to purchase limited time deals on clothing, toys, beauty products, and other merchandise. However, growth has been slowing thanks to a no-returns policy and very slow delivery times.
QVC has been an at-home staple for many people, and together companies will be worth more than $10 billion.
In the past, Zulily’s chief executive, Darrell Cavens has likened Zulily to the web’s version of QVC.
In an interview Monday, executives from the two companies said they had been talking for a few months before they agreed. There are no major changes happening at the top of the companies, both claim. Mr. Cavens said. “I am staying on and look to be here for a very long time,” he added.
Mike George, QVC’s president and CEO, said the goal of the combination is to accelerate sales growth. He also hopes to expand on the age range of people for both products.
With the two companies under one roof, “we can expose brands to more customers,” and there will be the chance to encourage people who use one company to use the other as well.
Mr. Cavens said that Zulily will stick to its unusual business model - there will be little inventory, which means that shipping will still be slow. Hopefully QVC can come up with a method to change that sooner rather than later.
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QVC, founded in 1986 and based in West Chester, Pa., generated $8.8 billion in revenue last year, up 2% from a year ago. Its adjusted operating income, a measure of profits, rose 5.5% to $1.9 billion.