As Zulily Folds, Retailer Points the Finger at Amazon

A message on the Zulily website indicates the company is liquidating its inventory.

Online retailer Zulily, once a Silicon Valley darling, has begun the process of winding down its business, with court filings indicating plans to close its Seattle headquarters as well as warehouses in Nevada and Ohio and a liquidation sale underway online.

The company, which was acquired from Qurate Retail Group by investment firm Regent L.P. in May 2023, has not made a formal announcement of the closure, but several Zulily employees have commented on the news on LinkedIn, including Zulily Recruiting Manager Erin Hanson, who confirmed that “Zulily is unfortunately closing its doors in the upcoming months.”

Worker Adjustment and Retraining Notification (WARN) filings in Washington State, Nevada and Ohio confirm that the company is planning to close its Seattle headquarters as well as its warehouses in McCarran, Nev. and Lockbourne, Ohio, impacting more than 800 employees across the three locations. “This layoff will be permanent, and the company’s operations at the facility will permanently cease,” reads Zulily’s notice filed with the state of Ohio.

Over the weekend, GeekWire reported that the Zulily website featured the message “All sales are final during Zulily’s going-out-of-business sale,” but that message has since been replaced with a banner reading, “Final sale. All items must go.” 

Then on Monday, Dec. 11, Zulily filed suit against Amazon, piggybacking on the FTC’s recent antitrust lawsuit in which Zulily is specifically mentioned. In its separate lawsuit, which was filed in U.S. District Court in Seattle, Zulily claims that anticompetitive practices by Amazon played a large part in its demise. 

“Zulily, an online retailer dedicated to offering consumers low prices, is one of Amazon’s victims,” reads the Zulily lawsuit. “The FTC complaint alleges that since at least 2019, Amazon specifically targeted Zulily as an emerging online superstore. But rather than compete on the merits, Amazon set out to ‘destroy’ Zulily instead, by coercing third-party retailers and wholesale suppliers to agree to ‘price parity,’ i.e. to artificially raise Zulily prices at or above Amazon’s and to punish any sellers who cheated. Punishments ranged from disqualifying a seller from the ‘Buy Box’ to ‘total banishment from Amazon’s Marketplace.’”

The result, according to the lawsuit was “substantial revenue losses and reduced traffic to Zulily’s website.”

Amazon has not responded to the Zulily lawsuit, but the company has asked a federal court to dismiss the FTC’s larger suit on the grounds that the FTC has failed to show evidence of anticompetitive behavior. Whether news of the demise of one of Amazon’s original competitors will weigh in the court’s decision remains to be seen.