American Eagle Outfitters is literally serious about owning its supply chain
American Eagle Outfitters (AEO) will acquire Quiet Logistics in a $350 million cash deal, another step in a strategy to gain greater control over its supply chain.
The acquisition marks the second supply chain deal in recent months for the apparel retailer. It comes at a time when supply chain disruptions have become commonplace for brands and retailers.
Quiet Logistics, which is based in Massachusetts, operates in-market fulfillment centers for AEO in Boston, Chicago, Los Angeles, Dallas, St. Louis and Jacksonville. The facilities make use of robotics and human personnel to provide cost-effective same- and next-day delivery services for AEO and other retailers and brands.
“Our vision is to create an on-demand, hyper-scaled operations platform that enables brand success,” said Jay Schottenstein, AEO’s executive chairman and CEO. “Quiet Logistics has provided significant benefits to AEO over the past year and we are leveraging our healthy cash position to ensure ongoing advantages.”
“A reliable and consistent in-market fulfillment network is vital in today’s marketplace. The Quiet Logistics team shares our vision for an asset-light, technology-led supply chain network and brings strong expertise,” said Michael Rempell, AEO’s COO.
The deal for Quiet Logistics follows American Eagle’s August acquisition of AirTerra, a startup founded by former Nordstrom chief supply chain officer Brent Beabout, which has developed a shipper aggregator system it claims will deliver packages more quickly and with greater reliability and less cost.
AirTerra’s system aggregates packages from multiple shippers through its own network in major metropolitan areas. It’s “point-to-point” network is designed to ship parcels across long zones faster and with a greater degree of control than offered through legacy shippers. In the end, companies selling goods online should see the time from “click to deliver” reduced along with costs for those deliveries.
Mr. Rempell said on his company’s second quarter earnings call in July that “transforming our supply chain is the major priority” for AEO.
“We are delivering products to customers faster, and despite industry-wide cost increases, our delivery expense is leveraged as a percent of sales,” he said. “Needless to say, I believe our supply chain platform truly is a competitive advantage. The investments we’ve made to-date are paying off. As global supply chains continue to be disrupted, this is creating opportunities for us to become even faster, more agile and more efficient.”
- American Eagle Outfitters to Acquire Quiet Logistics and Strategic Investments to Further Enhance Supply Chain Capabilities – American Eagle Outfitters
- American Eagle acquires logistics startup to help transform its supply chain – RetailWire
- American Eagle Outfitters, inc (AEO) Q2 2021 Earnings Call Transcript – The Motley Fool
DISCUSSION QUESTIONS: What roles do you see the acquisitions of AirTerra and Quiet Logistics playing in AEO’s supply chain strategy? What do you see as the biggest opportunities connected to the supply chain for AEO and other retailers?