QVC parent company to buy Zulily for about $2.4 bln

Liberty Interactive Corp, the parent company of QVC, has agreed to acquire Seattle-based Zulily, an ecommerce site that targets moms and their children, for about $2.4 billion. The deal is expected to close in the fourth quarter of this year. In November 2013, Zulily went public, launching its IPO on the NASDAQ under the ticker symbol “ZU.” Its pre-IPO backers were Maveron, August Capital, Trinity Ventures, Meritech Capital Partners and Andreessen Horowitz.

PRESS RELEASE

WEST CHESTER, Pa., Aug. 17, 2015 /PRNewswire/ — QVC, the global leader in video and ecommerce retail, today announced that its parent, Liberty Interactive Corporation (“Liberty Interactive”) (Nasdaq: QVCA, QVCB, LVNTA, LVNTB) has entered into a definitive agreement to acquire zulily, inc. (“zulily”) (Nasdaq: ZU), a leading ecommerce site serving millennial moms and the digital-only generation, for approximately $2.4 billion. Under the proposed transaction, zulily will join the QVC Group to create a discovery-driven and experiential digital commerce powerhouse with appeal that spans generations of women.

Since its inception in 2010, zulily has emerged as a destination brand for millions of millennial customers, becoming one of the few retailers in history to exceed $1 billion in annual net sales in five years. Today, zulily brings young moms special finds every day, through desktop, mobile websites and mobile apps that feature a curated, constantly changing collection, spanning apparel, fashion accessories, children’s apparel, home decor, toys, gifts and more. With a vast network of 10,000 vendor partners, zulily offers thousands of new products every day from entrepreneurs and top brands, all at compelling values. Approximately 56 percent of its orders are placed over mobile devices.

Together, the QVC and zulily platforms represent combined annual revenues of more than $10 billion and 230 million units shipped globally to 19 million customers in 85 countries. Highly-complementary customer bases span generations of women, offering both companies the opportunity to extend their businesses beyond their respective core audiences. Adding zulily to the QVC Group allows QVC to reach an audience of young mothers who love to shop, and to accelerate its mobile leadership.

“QVC and zulily share a passion for creating a unique shopping experience that is rooted in discovery and brings carefully curated products to life. Together, we will further engage modern women who love to shop in new and compelling ways,” said Mike George, President and CEO, QVC, Inc. “As online shopping evolves, this partnership brings together two high-performing and highly-complementary leaders in ecommerce. We look forward to welcoming the talented zulily team to the QVC Group as our shared values and beliefs create an incredibly strong foundation for us to collaborate across all aspects of the business and transform how we serve customers in new, digital-first ways.”

“zulily and QVC are two distinctive customer centric brands that are passionate about delivering an exceptional shopping experience and surprising and delighting our customers, each and every day. There are tremendous opportunities to accelerate the growth of the zulily brand for our customers, our employees, and our vendors with QVC’s partnership,” said Darrell Cavens, President and CEO, zulily, Inc. “Together, zulily and QVC have complementary philosophies about our approach to entertaining and engaging our customers and we’ll now have the ability to unlock synergies for growth and deliver new ways to innovate on the discovery commerce model and change the way people shop.”

While each company will maintain its distinctive and powerful brand identity, this transaction will enable both businesses to expand their product lineup, brand portfolio, and vendor network in order to bring new, exciting experiences and value to their customers. Through zulily, QVC will have access to additional platforms to market its unique assortment, from Today’s Special Value to exclusive proprietary brands. QVC’s expertise and resources in attractive categories like Beauty, Home Decor and Apparel Special Sizes will enable zulily to expand its category offerings, and expose its customers to a distinctive shopping experience through joint on-air and online programming events.

Additionally, both companies will be positioned to thrive through intelligent cross-marketing to a combined customer base of 19 million and millions more email prospects, leveraging QVC’s deep expertise in analytics and zulily’s powerful personalization tools.

QVC will look to leverage zulily’s technologies, which use historical and real-time data to customize offerings for millions of customer touch points every day, to enhance customer engagement. QVC also sees opportunities to utilize zulily’s extraordinarily agile and efficient digital content production system. Meanwhile, zulily will explore incorporating QVC’s deep video expertise, as well as its flexible customer finance systems, to enhance its shopping experience, and unlock incremental demand on its own platforms.

With live programming broadcasting to nine countries on three continents, QVC remains focused on global growth, reflected in the August 2015 launch of QVC France. QVC sees opportunities to further accelerate zulily’s international growth through its local market knowledge, vendor relationships and platforms.

Together under the QVC Group, zulily and QVC will be able to leverage their combined scale, capabilities and customer bases to accelerate each company’s sales and deliver cost savings by leveraging their combined purchasing volumes.
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, Chairman of the Board of Liberty Interactive, and Greg Maffei, President and CEO, Liberty Interactive. Darrell Cavens will report directly to Mike and the other members of the Executive Committee.

Following the close of the transaction, QVC and zulily will operate under a management structure that enables each company to remain focused on its respective business, yet facilitates close collaboration to drive benefits across the combined organization. zulily’s President and CEO, Darrell Cavens, will continue to lead the business, and the rest of zulily’s senior management team, which has been instrumental in the success of the company, will remain in place and continue to report to him. zulily Chairman and co-founder Mark Vadon will join the Board of Liberty Interactive and provide strategic counsel and support to the companies.

The transaction is expected to be completed in the fourth quarter of 2015, subject to regulatory approval and other conditions.

About QVC
QVC, Inc., a wholly owned subsidiary of Liberty Interactive Corporation (NASDAQ: QVCA, QVCB), 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, QVC.com, 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 (http://www.zulily.com) 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 decor, 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.