American Eagle Outfitters is adding Quiet Logistics to its portfolio.
The retailer has agreed to purchase the logistics firm for $350 million in cash, building upon its acquisition of logistics firm AirTerra earlier in the year as it continues to enhance its supply chain capabilities.
“We continue to be extremely pleased with the pace of our business and are executing well against our Real Power, Real Growth plan,” said Jay Schottenstein, American Eagle Outfitters’s executive chairman and chief executive officer. “An important pillar of our strategy is transforming our supply chain to create greater agility, speed and diversification. Our vision is to create an on-demand, hyper-scaled operations platform that enables brand success. Quiet Logistics has provided significant benefits to AEO over the past year and we are leveraging our healthy cash position to ensure ongoing advantages. Also, as we continue to expand these services to other brands and retailers, we believe the business will scale, generating incremental value for our shareholders.”
Quiet Logistics has locations in Los Angeles, Dallas, St. Louis, Mo., and Jacksonville, Fla., that provide same-day and next-day delivery options to consumers and stores alike. The company will be a wholly owned subsidiary of American Eagle Outfitters and will continue to run its business independently.
“A reliable and consistent in-market fulfillment network is vital in today’s marketplace,” said Michael Rempell, American Eagle Outfitters’s chief operations officer. “The Quiet Logistics team shares our vision for an asset-light, technology-led supply chain network and brings strong expertise. This transaction will formalize our successful partnership, provide control and flexibility within our operations and accelerate the growth of Quiet Logistics. We look forward to driving ongoing advantages for our brands and its high-value customer base.”
Eugene Gorab, Quiet Logistics’ executive chairman, added: “We’re excited to join forces with AEO, a fellow industry innovator, to accelerate the adoption of leading edge fulfillment solutions. Through a shared distribution network, our customers gain significant operational advantages, enabling them to focus more intently on increasing the value of their brands and products.”
American Eagle Outfitters Inc. — parent company to the American Eagle, Aerie, Offline by Aerie, Todd Snyder and Unsubscribed brands — quietly acquired AirTerra, the logistics firm founded by former Nordstrom chief supply chain officer Brent Beabout, in August for an undisclosed amount. The move was meant to help the retailer leverage its network of stores and distribution centers to fill orders faster and offer same-day services, despite ongoing supply chain issues.
It was also the first time a specialty retailer like American Eagle Outfitters decided to purchase its own last-mile delivery service, enabling it to compete with the big three mass-channel merchants — Amazon Inc., Walmart Inc. and Target Corp. (all of which already have their own last-mile delivery services in place) — in terms of same-day and last-mile delivery.
“We know that the biggest question being asked today is, ‘How do we build up the supply chain?’” Schottenstein told WWD in September. “So, we’ve been working on this for a long time. When it comes to COVID-19 [headwinds], I can go back to November 2019, and we were on top of [managing the supply chain]. We knew what was going on with containers for the last several months. This is nothing new: the port delays, the container shortages.
“We believe that there are going to be problems out there for other retailers [this holiday],” he said. “There will be shortages of goods out there for [everything] — not just for apparel — but anything you want to buy. Those retailers who are able to get their merchandise out on a timely basis, it’s going to be a big opportunity for them.
“And what we’ve done, we’ve put a lot of the holiday orders [in place] early to get it rolling earlier,” Schottenstein continued. “We feel that we’ll come out pretty good for the season. There are hiccups out there, but overall, we feel that we’re in pretty good shape. We’re anticipating a very strong third and fourth quarter. And despite everything going on out there, I think that the things that we’ve invested in — into our systems, into our logistics — we’re going to see the benefits coming through for the next couple of quarters and going into spring of next year, too. And we already have air freight that we bought up. So, if there is excess air freight, we’ll be selling it.”
American Eagle Outfitters logged $121 million last quarter as it continues to show strength across all brands and continued to open new Aerie, Offline and Todd Snyder stores, as well as the premium denim concept shop AE 77 in New York.
Shares of American Eagle Outfitters are up approximately 75 percent, year-over-year.