This is What Bed Bath & Beyond and Zulily Now Have in Common
Beyond Inc. is growing both its customer and brand base.
The owner of the Overstock and Bed Bath & Beyond e-tail banners has acquired what was the defunct Zulily brand for $4.5 million. The acquisition includes certain intellectual property assets, the Zulily website and domain names, customer database and social media accounts, among other items. The transaction does not include Zulily’s liabilities, liens and debts.
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“This acquisition doubles down on our belief in the off-price market, and its importance to building our business, improving our margin profile and growing our customer file,” Marcus Lemonis, Beyond’s executive chairman, said. “Zulily, in combination with our legacy brand, Overstock, will provide our vendors multiple outlets that, not only meet customers at various price points, but also offer an additional outlet to improve their inventory turns and financial performance.”
Lemonis said the deal represents a strategic step forward in the long-term growth of Beyond.
“We’re excited about the global vendor pool this acquisition opens the door to, driving incremental revenue by reengaging Zulily’s 18 million customers as well as the existing Beyond customer database with significant synergies across product categories,” he said.
Beyond expects the new Zulily site to be fully operational by the end of the second quarter.
“Bringing the trusted Zulily brand into our asset-light business model allows us to offer furniture and home furnishings, apparel and footwear, jewelry and watches, among other categories that are also core competencies of our off-price Overstock business with flash sale deal pricing,” Overstock’s CEO Dave Nielsen said.
According to Nielsen, it wouldn’t take much—nor any major investment from Beyond—to ramp up Zulily operations since its website and mobile app are already available on the Shopify platform. He said operations can be integrated with Beyond’s back-end systems for order fulfillment and logistics.
Nielsen is also gearing up for Overstock’s relaunch, scheduled for later this month.
Online home retailer Overstock.com began operations as a liquidator in 1999 selling excess or closeout inventory across multiple channels that include home, apparel, shoes, lighting, handbags and luggage. It went public in May 2002. The business was pivoted to a focus on home goods and furniture in 2021 by then CEO Jonathan Johnson.
In July 2023, Johnson led the team that acquired the Bed Bath & Beyond IP assets out of bankruptcy for $21.5 million. That deal was expected to help Overstock expand its vendor relationships in new areas, such as small appliance and home decor.
While the move helped the parent firm move away from its closeout image, another change one month later was the rebranding of the Overstock.com site to the Bed Bath & Beyond banner. Last November, Johnson departed as Overstock.com Inc. was undergoing its own transformation by rebranding its corporate name to Beyond Inc.
Lemonis, a retail veteran best known for reviving struggling businesses on CNBC’s “The Profit,” became Beyond’s executive chairman last month. Other executive moves include Nielson heading up Overstock and Chandra Holt as the new CEO of Bed Bath & Beyond.
The Zulily banner was thought to have reached the end of the line in December when the website announced a company shutdown and inventory liquidations of up to 70 to 85 percent off many fashion and home categories.
The site began as a children’s apparel flash-sale site in 2009. The company was once a Wall Street tech darling with its 2013 initial public offering valued the company at $2.6 billion. Despite $1 billion in annual volume and a peak market value north of $6.5 billion, early signs of stress were evident in 2014 when sales began to slow. Liberty Interactive’s QVC division acquired Zulily in August 2015 for $2.4 billion, but Zulily never was able to regain its former glory. The company’s operations were restructured in 2019, but more layoffs followed in 2022 when revenue contracted. More layoffs occurred in 2023. Qurate Retail, the former Liberty Interactive before its rebrand, sold Zulily to private equity firm Regent LP in May 2023 for an undisclosed amount.
Following the shutdown, Gordon Brothers handled the sale of Zulily inventory and fixed assets. Proceeds were slated for disbursement to Zulily’s creditors.
Beyond’s acquisition of Zulily gives the brand a new lease on retail life. And Nielsen’s reference to Zulily’s flash sale deal pricing hints that the banner will provide Beyond with three channels of pricing power among its brands: Zulily with flash sale, Overstock at off price and legacy closeout and Bed Bath & Beyond with big box type deals and discount promotions.
That structure could mean that high margins may still be tough to obtain. But in theory, the benefit could be that products that don’t sell at one site could be moved to another, whether for special deals as in flash sale at Zulily or for liquidation to clear out the goods at Overstock. And because each brand still has enough cache value, Beyond can sell exclusives that are unique to each site to help maintain separate banner identities.
That could turn out to be a win-win for the company, given that consumers are still feeling inflation’s impact and have been on the hunt for deals.
