Beyond, Inc. Acquires Ecommerce Pioneer Zulily, Supercharging its Off-Priced Business

Rhea-AI Summary

Beyond, Inc. (BYON) acquires Zulily's intellectual property and brand assets to strengthen its position in the off-price market, enhancing value for customers. The $4.5 million transaction aims to improve margin profile and customer file growth, providing vendors with multiple outlets to boost inventory turns and financial performance.

Insights

Market Research Analyst

The acquisition of Zulily's intellectual property and brand assets by Beyond, Inc. is a significant move in the off-price retail market. This sector is characterized by selling quality goods at lower prices, often through time-limited sales events or overstock clearance, which attracts cost-conscious consumers. The off-price segment has shown resilience during economic downturns, as consumers become more price-sensitive, making it an attractive area for expansion.

By integrating Zulily with Beyond's existing brands like Overstock, the company is poised to create a more diversified portfolio that can leverage cross-promotional opportunities and streamline inventory management. This could lead to improved margins through better inventory turnover and reduced holding costs. Furthermore, the acquisition enhances Beyond's customer database, which can be utilized for targeted marketing and customer retention strategies.

However, the success of this strategic move will depend on Beyond's ability to integrate Zulily's operations and maintain the brand's unique value proposition. The off-price market is competitive, with major players like TJX Companies and Ross Stores, so differentiation and efficient supply chain management will be key. For stakeholders, the short-term benefits include potential market share growth, while long-term benefits hinge on sustained customer loyalty and operational synergies.

Financial Analyst

The financial aspect of this acquisition is noteworthy, with Beyond, Inc. purchasing Zulily's assets for $4.5 million plus acquisition-related costs, using cash on hand. This indicates a strong liquidity position for Beyond and suggests that the company is strategically utilizing its cash reserves to invest in growth opportunities without incurring debt. For investors, this is a positive sign as it avoids the immediate dilution of equity and interest expenses that could have accompanied financing the acquisition through debt.

However, investors should monitor the post-acquisition integration process closely as it can impact the financial performance of Beyond. The key metrics to watch would be the contribution of Zulily to Beyond's revenue, changes in operating margins and the efficiency of inventory management post-acquisition. Additionally, the valuation of the deal at $4.5 million will be scrutinized in relation to the expected future cash flows from Zulily's assets.

It's also important to consider the potential for synergies between Zulily and Beyond's existing operations, which could result in cost savings and revenue growth. If Beyond can successfully leverage Zulily's customer base and brand assets, there could be a positive impact on the company's overall financial health and stock performance in the long term.

E-Commerce Strategy Expert

From an e-commerce perspective, the acquisition of Zulily's assets is a strategic endeavor to bolster Beyond's online retail presence. Zulily has been known for its flash sale model, which creates a sense of urgency and exclusivity, driving customer engagement and repeat purchases. Integrating this model with Beyond's existing e-commerce infrastructure could enhance the customer experience and broaden the company's appeal.

Moreover, the acquisition includes Zulily's customer database and social media accounts, which are valuable assets in the digital age. Beyond can utilize this data to gain insights into consumer behavior, preferences and spending patterns, which can inform product offerings, pricing strategies and marketing campaigns. The challenge will be to maintain the distinct brand identity of Zulily while finding synergies with Beyond's current e-commerce ecosystem.

Additionally, the software assets acquired to run the Zulily website could potentially be integrated with Beyond's technology stack, leading to improved operational efficiencies and a seamless customer journey across different platforms. The strategic use of these digital assets will be crucial in driving traffic, conversion rates and ultimately, revenue growth for Beyond.

Company strategically doubles down on the off-priced home and lifestyle segment

MIDVALE, Utah, March 07, 2024 (GLOBE NEWSWIRE) -- Beyond, Inc. (NYSE: BYON), owner of online retail giants Overstock and Bed Bath & Beyond, today announced the acquisition of the intellectual property and other brand assets of Zulily, the flash sale pioneer and ecommerce retailer. This strategic move was designed to further strengthen Beyond's position in the off-price market, enhancing value for customers on the products they’re looking for. The addition of Zulily will complement Beyond’s suite of brands, including Overstock, which is scheduled to relaunch later this month.

“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,” said Marcus Lemonis, Executive Chairman of Beyond, Inc. “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.”

As part of the transaction, Beyond, Inc. acquires certain intellectual property assets related to the Zulily brand, including website and domain names, trademarks, tradenames, customer database, social media accounts, software to run the Zulily website, and goodwill associated with the brand. The transaction excludes all of Zulily’s liabilities, liens, and debts. Pursuant to Beyond’s asset purchase agreement, the Company purchased the assets for $4.5 million plus acquisition-related costs, funded entirely with cash on hand.

“This acquisition marks a strategic step forward in the transformation and long-term growth of Beyond,” said Lemonis. “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,” said Lemonis.

The new Zulily site is expected to be fully functional by the end of Q2 2024 and contribute to Beyond’s 24-month revenue goal without adding any additional incremental fixed expense.

“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,” said Dave Nielsen, CEO of Overstock. “The ramp with Zulily is simple, as the website and mobile app are already built and available in the Shopify environment. We will be able to integrate it seamlessly into our back-end systems for order fulfillment, logistics, and operations to be handled by our existing teams.”

About Beyond
Beyond, Inc. (NYSE:BYON), based in Midvale, Utah, is an ecommerce expert with a singular focus: connecting consumers with products and services that unlock their homes’ potential. The Company owns Overstock, Bed Bath & Beyond, Baby & Beyond, and other related brands and associated intellectual property. It’s suite of online shopping brands feature millions of products for various life stages that millions of customers visit each month. Beyond regularly posts information about the Company and other related matters on the Newsroom and Investor Relations pages on its website, Beyond.com.

Beyond, Bed Bath & Beyond, Welcome Rewards, Overstock and Overstock Government are trademarks of Beyond, Inc. Other service marks, trademarks and trade names which may be referred to herein are the property of their respective owners.

Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include all statements other than statements of historical fact, including but not limited to statements regarding the impact of the acquisition and the Zulily brand on our business; the relaunch of Overstock; the launch of the new Zulily site; our future actions, growth, strategy, or performance, including with respect to revenue, margin profile and customer profile. Additional information regarding factors that could materially affect results and the accuracy of the forward-looking statements contained herein may be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 23, 2024, and in our subsequent filings with the SEC.

Beyond, Inc. Communications:
Sarah Factor
pr@beyond.com

FAQ

What did Beyond, Inc. (BYON) acquire from Zulily?

Beyond, Inc. acquired the intellectual property assets related to the Zulily brand, including website and domain names, trademarks, tradenames, customer database, social media accounts, software to run the Zulily website, and goodwill associated with the brand.

How much did Beyond, Inc. (BYON) pay for the acquisition?

Beyond, Inc. paid $4.5 million plus acquisition-related costs for the acquisition of Zulily's intellectual property and brand assets.

How was the acquisition funded?

The acquisition was funded entirely with cash on hand by Beyond, Inc. (BYON).

Who is the Executive Chairman of Beyond, Inc. (BYON)?

Marcus Lemonis is the Executive Chairman of Beyond, Inc. (BYON).

What is the strategic goal of acquiring Zulily's assets?

The strategic goal of acquiring Zulily's assets is to strengthen Beyond, Inc.'s (BYON) position in the off-price market, improve margin profile, and grow the customer file while providing vendors with multiple outlets to enhance inventory turns and financial performance.