Regent, a Los Angeles-based investment firm with expertise in the retail and apparel sectors, has acquired online retailer Zulily, formerly a wholly-owned subsidiary of Qurate Retail, which also owns the QVC and HSN businesses and the owner of Cornerstone Brands. The divestiture aligns with Qurate Retail’s Project Athens strategy articulated in June 2022 to optimize its brand portfolio.
“Zulily serves an important role for moms by offering a fun shopping experience with brand names and special finds at incredible prices. We are confident Regent is the right partner for Zulily to continue serving its customers while benefiting from Regent’s depth of operational and strategic expertise in the retail and apparel sectors,” said David Rawlinson, president & CEO of Qurate Retail. “We are in the midst of a turnaround at Qurate Retail. This divestiture will allow our management team to focus better on our core video commerce assets, QVC and HSN, and Cornerstone Brands while preserving liquidity to further strengthen our balance sheet. I would like to thank Terry Boyle and the entire Zulily team for their continued hard work and commitment amidst a challenging retail environment.”
Regent is a global investment firm that owns and operates several international consumer brands, including Club Monaco, DIM Paris, La Senza, Escada, and DiamondBack. Regent said it focuses on driving transformative change by strategically repositioning businesses and pursuing opportunities to accelerate growth and innovation. Regent portfolio companies employ over 20,000 people around the world. Since its inception, Regent has successfully acquired businesses from leading Fortune 500 and large-cap companies around the globe, with 30+ businesses acquired since 2015. Their portfolio includes companies in retail, media, technology, and industrial sectors.
“We are excited to partner with the Zulily team to help the company return to its entrepreneurial roots as an independent business,” said Michael Reinstein, chairman of Regent. “Zulily has been a trailblazer using technology to create a compelling online customer experience. Their revolutionary logistics and fulfillment network has also set a new industry standard, and we are excited to leverage its immense potential to grow the Zulily business in new markets.”
In connection with the transaction, Zulily will no longer be a co-borrower in QVC, Inc.’s bank credit facility, and Qurate Retail repaid Zulily’s outstanding borrowing, which was approximately $80 million as of closing.
QVC, Inc.’s leverage, as defined in its credit agreement as of March 31, 2023, assuming the Zulily divestiture had occurred before such date, would have been reduced to 2.3x. Based on the terms of the sale agreement, there is potential for Qurate Retail to receive an earnout in future years.