Before Christmas 2023, hundreds of Zulily employees and thousands of consumers were shocked when the Zulily website suddenly went “down for maintenance” — here’s what happened to the once-powerful Seattle-based online retailer.

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Around the same time Zulily shoppers were greeted with a down for maintenance message on the website, waves of Zulily layoffs were announced, as well as plans to shut down two warehouses in Nevada and Ohio in early 2024, GeekWire reported.

When Zulily launched a “going-out-of-business” sale before the 2023 holiday season amid reports that three Zulily Seattle offices — including Zulily’s Seattle headquarters — were closing, it seemed the writing was on the wall: Zulily was done for good.

What, however, might have caused such a seemingly sudden downfall for a tech company once valued at more than $7 billion?

Why did Zulily go out of business?

The first sign of trouble for the Seattle online retailer came about when Zulily was acquired by a Los Angeles-based private equity firm, Regent, in May 2023. That said, Qurate — Zulily’s former owners — said in a statement that Regent planned to expand into new markets.

“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,” Qurate president and CEO David Rawlinson said.

Meanwhile, Regent chairman Michael Reinstein added, “We are excited to partner with the Zulily team to help the company return to its entrepreneurial roots as an independent business.”

Zulily lawsuits

By Dec. 2023, however, GeekWire reported that Zulily was hit with several lawsuits from vendors over alleged breach of contractual obligations and unpaid bills ranging from around $200k to more than $2 million in debts.

From there, problems for the retailer seemed to grow, until the final “going-out-of-business sale” was announced. As of January 2023, Douglas Wilson Companies vice president, Ryan C. Baker, said in an open letter posted on the Zulily website that Zulily.com was under the control of Douglas Wilson Companies, in an “Assignment for the Benefit of Creditors (‘ABC’) … to conduct an orderly wind-down of the business to maximize value for the companies’ creditors.”

Wilson’s statement added, “This decision was not easy, nor was it entered into lightly. However, given the challenging business environment in which Zulily operated and the corresponding financial instability, Zulily decided to take immediate and swift action.”