US-based online retailer Zulily has officially confirmed decision to shut down operation and liquidate assets, a move intended to maximise value for its creditors.
The retailer cited challenging environment as the main reason for winding down of its business.
This comes a week after the retailer appointed Douglas Wilson Companies (DWC), a specialised business, workout, and real estate services firm, as the assignee in its Assignment for the Benefit of Creditors (ABC) transaction.
The ABC, which is an alternative to declaring bankruptcy, helps orderly wind down of businesses and monetises companies’ assets for the benefit of their creditors.
Prior to completing the wind-down process, Zulily has committed to fulfilling most of its outstanding orders within the next two weeks.
The retailer has cancelled and refunded for those orders that cannot be fulfilled.
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In a statement on Zulily’s website, Douglas Wilson Companies management consultant vice-president Ryan Baker said: This decision was not easy nor was it entered into lightly. However, given the challenging business environment in which Zulily operated, and the corresponding financial instability, Zulily decided to take immediate and swift action.”
Zulily, which is based in Seattle, offers clothing, footwear, homeware essentials and others.
Founded in 2010, the retailer was valued at approximately $9bn in 2015 and secured sponsorship deal with Major League Soccer’s Seattle Sounders in 2019.
However, Zulily struggled to stay afloat after facing stiff competition from e-commerce major Amazon and fast-fashion retailers like Shein and Temu.
With an aim to revitalise the business, the then-owner Qurate Retail sold the retailer to investment company Regent in May this year.
The new owner also shifted its headquarters to smaller space and reduced workforce.
Earlier this month, Zulily filed a complaint against Amazon and alleged that the latter was working to “destroy” it through a price-fixing scheme.