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Zulily hit with lawsuits from vendors and more layoffs in latest trouble for struggling retailer

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(GeekWire Photo / Taylor Soper)

Zulily is laying off more employees and facing two lawsuits over alleged unpaid invoices, in the latest signs of trouble for the Seattle-based online retailer since it was acquired by a private equity firm earlier this year.

Some employees were notified Thursday that they were being let go, according to posts on LinkedIn.

Meanwhile, a new lawsuit filed this week by GenUI, a Seattle-based software development consultancy, alleges that Zulily breached contractual obligations and owes the company $191,776 for work completed earlier this year.

GenUI has performed work for Zulily since 2017, but starting this past April, Zulily started to fall behind on monthly payments, according to the suit filed in King County Superior Court.

GenUI says in the lawsuit that it has contacted Zulily “numerous times to demand payment” but has not been paid.

Los Angeles-based private equity firm Regent bought Zulily from QVC parent Qurate in May.

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“We’ve had a longstanding business relationship with Zulily, and it’s really unfortunate we find ourselves in this position today,” GenUI CEO Jason Thane told GeekWire. “Ideally we’d like to get a response from the new ownership and resolve this before year end so we can each focus on running our respective businesses.”

In another lawsuit filed in October, Texas-based Omni Logistics alleges that it is owed more than $2.7 million for services provided to Zulily. In a new filing this week, Zulily denied allegations that it owes payment to Omni.

We’ve reached out to Zulily and Regent and will update this story if we hear back.

Since changing ownership this year, Zulily has gone through two rounds of layoffs and moved into a smaller headquarters building in Seattle.

GeekWire reported in September that several vendors weren’t getting paid by Zulily following the Regent acquisition.

In a May press release announcing its acquisition, Regent said it planned to grow Zulily’s business in new markets. However, Zulily’s logo is no longer included on Regent’s webpage listing its portfolio companies.

A customer who lives in Canada said this week that they were not able to buy anything from Zulily’s website.

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Regent’s portfolio includes Club Monaco, Dim Paris, and Redline Bicycles, among others. It has acquired more than 30 businesses since 2015.

Founded in 2010, Zulily got its start by offering daily deals on products for moms and kids, and later expanded its product selection. The company went public in 2013. Qurate paid $2.4 billion to acquire Zulily in 2015.

Zulily was already struggling under Qurate before the sale to Regent. It reported a 17% drop in revenue during the first quarter, to $192 million, and a $43 million operating loss.



Source: Geek Wire

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