Minnesota online retailer acquires majority stake in Zulily, expanding national reach

An Eagan online retailer has paid $5 million for a majority stake in the flash-sale site Zulily, expanding its national reach.

Lyons Trading Co., operator of Proozy.com, will gain a 75% stake in the Zulily brand under the deal with Beyond, the former Overstock.com that bought the remnants of Bed Bath & Beyond. Other terms of the deal, which valued Zulily at $6.7 million, were not disclosed.

Known for deals on athletic brands like Nike, Adidas and Under Armour, Proozy has an estimated 3 million customers. Zulily reaches 131 million customers.

“The best part about Proozy and Zulily is that it shares the same customer,” which tends to be savvy, deal-seaking and predominantly female, said Proozy CEO Jeremy Segal.

The Zulily site is currently down as its assets are transferred to Proozy and will relaunch in the near future, according to the companies.

“With the loyalty of the Zulily customer and the strength of Proozy‘s expertise in the deal space, we have confidence that Proozy will bring you a familiar Zulily shopping experience,” Beyond said in a statement.

The acquisition will also expand Proozy’s existing product selection, Segal said in a statement he posted on LinkedIn.

“Zulily will continue operating under its established brand name, with enhancements in product selection, shipping efficiency, and exclusive deals powered by Proozy’s supply chain expertise,” the statement said.

Zulily has changed hands four times in less than two years. The once-popular flash-sale site’s market cap peaked at $7 billion in 2014, four years after its launch in 2010.

QVC Group, formerly Qurate Retail Group, purchased the brand in 2015. A year later, the company saw a 23% revenue spike to $366 million.

But then Zulily started to lose its luster. QVC sold the brand in 2023 to Los Angeles-based investment firm Regent.

The firm assumed the repayment of $80 million in debt. Almost seven months after acquisition, Zulily went out of business.

By March 2024, Beyond bought the defunct company’s brand assets and intellectual property from the investment firm for $4.5 million.

In a February earnings call, Beyond executive chairman Marcus Lemonis told investors and analysts the company is pursuing multiple avenues for profitability. Chief Financial Officer Adrianne Lee said the company will concentrate on core brands.

Now, Zulily will be a featured brand on Proozy, Segal said.

“The Zulily site was launched too quickly before and it never met the expectations of the legacy Zulily customer. They deserve it to be right,” Segal said.

Proozy itself will spend time improving itself as well, Segal said. Acknowledging some missteps Proozy shoppers have pointed out, he said the company has had to use a third-party business for packing and shipping as it grew, and it has had to move fulfillment centers several times over the past two years.

The result was large costs and distractions for the business, he said.

The company has an F rating from the Better Business Bureau. Segal said this is largely related to problems with fulfillment centers.

Now the company, which employs over 50 people, will focus on rebuilding the brand and customer experience by using drop shipping — a method of moving from the manufacturer directly to the retailer without going through the usual distribution channels.

Segal said the company is looking to build its team again.

“We want to create an environment where people can get great deals and not have to deal with the awful customer experience,” Segal said.

Segal said he believes Proozy’s vendor base will help Zulily grow — something Beyond struggled to achieve.