American Eagle Bulks Up Its Logistics Operations With $350M Acquisition
American Eagle Outfitters has inked a deal to acquire Quiet Logistics, a company that has been providing supply chain services to the fashion retailer.
Pittsburgh-based AEO will pay $350M in cash for the company, which will continue to provide logistics services to other clients as well, such as Mack Weldon, Outdoor Voices and Peloton.
The deal comes as retailers are struggling to firm up their supply chains, which have been disrupted by the coronavirus pandemic and labor shortages. Most retailers expect the disruptions to be long-lasting.
Quiet Logistics operates distribution facilities in Boston, Chicago, Los Angeles, Dallas, St. Louis and Jacksonville, Florida. Its network will create inventory efficiencies and provide affordable same-day and next-day delivery options to customers and stores, according to American Eagle.
"This transaction will formalize our successful partnership, provide control and flexibility within our operations, and accelerate the growth of Quiet Logistics," AEO Chief Operations Officer Michael Rempell said in a statement.
The deal isn't the first time American Eagle, which operates more than 1,000 stores in North America and Asia, has ventured into logistics. Earlier this year, the company bought e-commerce delivery startup AirTerra, which was founded by a former Nordstrom chief supply chain officer.
Other major retailers have been beefing up their logistics operations in recent years as well, even before the pandemic. Over the past three years, retail behemoth Walmart has been building its own delivery network such that it can deliver more than 160,000 items from about 3,000 of its stores nationwide. Walmart launched a delivery service, GoLocal, that will take goods to customers of other retailers.
In May, Target said that it will be adding five logistics facilities called sortation centers by the end of 2021 in addition to the four regional distribution hubs the company had already announced for this year. Like Walmart, Target has been expanding its own logistics capabilities since before the pandemic.