QVC is buying e-commerce site Zulily for $2.4 billionBy Shawn Knight
Liberty Interactive, parent company of television shopping specialist QVC, has agreed to acquire e-commerce company Zulily for $2.4 billion, or $18.75 per share. That price represents a 49 percent premium over the $12.57 shares were trading at last Friday.
The Wall Street Journal points out that the sale comes just three years shy of Zulily's November 2013 IPO in which shares were priced at $22. Early investors that stuck around will lose money on the deal although others like Alibaba Group Holding Ltd. that bought in when shares were trading below $13 will make a nice profit.
For those not familiar, Zulily operates a bit differently compared to most online retailers. The site specializes in limited-time sales of clothing, home products and toys although shortcomings such as slow delivery (it can take up to two weeks for purchases to arrive) and a semi-strict return policy no doubt keep some shoppers at bay.
From shoppers' perspective, not much will change following the acquisition. The two companies will be managed as separate brands meaning Zulily will retain its current executive management team. There also won't be any major changes to the company's strategy according to Zulily chief Darrell Cavens.
QVC boss Mike George said the goal is to accelerate sales growth. By having both companies under the same roof, they'll be able to expose brands to more customers.