DEATH OF PUREPLAY RETAIL

INTELLIGENCE REPORT DEATH OF PUREPLAY RETAIL RETURN ON INVESTMENT

Pureplays: Losers in a Winner-Take-All E-Commerce Economy (Cont’d)

Death of Pureplay Retail: Site Traffic to Zulily.com Thousands of Unique Monthly Visitors August 2013—August 2015

Fab’s downfall is not an isolated incident. Zulily, the pureplay flash sale site that caters to mothers, has followed a similar trajectory. After raising $138 million in capital funding, Zulily announced an IPO in November 2013 at $22 a share. 36 The retailer reached its peak stock price, just above $70, in February 2014 and attracted nearly 18 million unique monthly site visitors in July 2014. Yet analysts began to question the e-tailer’s business, citing inefficient fulfillment centers that averaged an order-to-ship time of 11.6 days. 37 The company’s YoY sales growth, site traffic, and stock steadily declined after 2014’s second quarter, and in August, QVC acquired Zulily for $18.75 a share, well below IPO price.

20k

16k

12k

8k

4k

0k

Unique Monthly Visitors (in thousands) Aug. 2013 Dec. 2013

Apr. 2014

Aug. 2014

Dec. 2014

Apr. 2015

Aug. 2015

Source: Compete.

Death of Pureplay Retail: Zulily YoY Sales Growth Q1 2014—Q2 2015

97%

87%

72%

52%

29%

4%

Q1 2014

Q2 2014

Q3 2014

Q4 2014

Q1 2015

Q2 2015

36. “ Zulily announces pricing of initial public offering ,” Nasdaq, November 14, 2013. 37. “ With QVC’s help, no more one-night stands for Zulily ,” CNBC, September 25, 2015.

Source: Company Quarterly Reports, Press.

37

January 12, 2016