QVC-parent Liberty Interactive Corp. is making a bigger push into digital, having signed a $2.4 billion agreement to acquire e-tailer Zulily Inc.
The transaction is expected to close in the fourth quarter. The combined platforms will have annual revenues of more than $10 billion, with 230 million units shipped globally to 19 million customers in 85 countries. The combined back-office synergies — even though each brand will operate separately — are also expected to enable the businesses to expand their product lineup, brand portfolio and vendor network. Further, QVC has live programming broadcasting to nine countries on three continents, and can help Zulily expand internationally through its local market knowledge, vendor base and platforms.
Darrell Cavens, chief executive officer of Zulily, said his firm was not involved in any sale process. According to Cavens, Liberty’s president and ceo Gregory B. Maffei initiated the contact with Zulily and discussions evolved from that first reach out. “It really felt like the two pieces together were more than they are individually,” he said.
Mike George, ceo of QVC, said that his company has had its eye on Zulily and watching what they’ve done in the areas of discovery, freshness and customer relationships. “We have very similar kinds of brands and they have attributes that we aspire to,” George said, adding that the two customer bases are complementary, with Zulily targeting 25- to 35-year-old Millennial moms and QVC focusing on the 35- to 60-year-olds, both of which love to shop.
One big plus in merging the two platforms is the $5 billion in e-commerce sales, with over half coming from mobile, George said.
George added the home shopping firm can learn from the five-year-old e-tailer, such as the way Zulily approaches personalization. “They introduce literally thousands of new items every day. There is a constant stream of freshness for their customer. The challenge is how to take the massive amount of product and introduce it in a way that is relevant,” he said.
Connected with the transaction, George will be appointed to Liberty’s executive committee, serving on that committee with Maffei and Liberty chairman John Malone. Cavens will report directly to George. Zulily’s executive management team will continue to report to Cavens. Zulily chairman and cofounder Mark Vadon will join Liberty’s board.