Logistics

American Eagle is spending big to better own the supply chain

The retailer is buying Quiet Logistics for $350 million, its second acquisition this year in the space.
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Francis Scialabba

· less than 3 min read

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It’s always good to have a backup. At least, that’s the approach American Eagle Outfitters is taking to tackle the supply-chain crisis.

AEO is buying Quiet Logistics, a digital fulfillment operator, for $350 million, the Wall Street Journal reported.

  • The Massachusetts–based startup, which currently has eight fulfillment centers across the US, offers same-day and next-day shipping options. It uses a mix of workers and robots to complete orders.
  • The acquisition is AEO’s second of the year in the space: It purchased logistics firm AirTerra in May.

“Supply chain is becoming more of a consumer-facing activity,” Shekar Natarajan, AEO’s chief supply-chain officer, said to the WSJ. “And in that world, you need to basically have consistency and control of your experience.”

Zoom out: “Shippers and fulfillment networks have been signaling for months that 2021’s holiday season will be even more constrained than 2020,” Jason Murray, CEO of e-commerce logistics company Shipium, told Retail Brew. “Major national retailers like AEO are frantically looking for alternatives to handle projected shipping volumes.”

  • Big names like Walmart, Target, and Home Depot are facing the crisis head-on—and even chartering ships to stay ahead of the situation.

Murray noted AEO’s acquisition is a smart move, but he’s interested in what comes in 2022: “How it translates into a new revenue-generating line of business after the holidays is an exciting development to watch.”

+1: Under Armour cited the actual shipping of goods as its biggest concern when it reported Q3 earnings yesterday.—JS

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