American Eagle has made strategic adjustments to its logistics arm, Quiet Platforms, following its formation through the acquisitions of Quiet Logistics and AirTerra in 2021. The company had initially pursued these acquisitions with the aim of reducing delivery costs, managing store inventory more efficiently, and generating additional revenue through offering logistics services to third-party clients.
The creation of Quiet Platforms was part of American Eagle’s broader strategy to enhance its competitive position in the retail market, positioning itself as a contender against major players such as Amazon, Target, and Walmart. Executive Chairman and CEO Jay Schottenstein emphasized in 2022 the potential benefits of these acquisitions for American Eagle and other retailers in terms of cost and delivery efficiency.
However, Quiet Platforms has encountered difficulties in expanding its third-party logistics services as anticipated by American Eagle. The challenges led to the departure of Quiet Platforms President and American Eagle Chief Supply Chain Officer Shekar Natarajan last year.
The performance of Quiet Platforms impacted American Eagle’s financial results for the fourth quarter, with the “Other” reporting segment, under which Quiet Platforms is classified, recording a $36.1 million loss in operating income for the year.
In response to these challenges, American Eagle is refocusing Quiet Platforms’ operations to better align with the company’s long-term goals, while still capitalizing on its strengths. According to a recent statement, adjustments include leveraging its regionalized fulfillment center network to locate inventory closer to stores and customers, thereby achieving faster delivery times and reducing costs.
Mathias, a spokesperson for the company, highlighted the efficiency gains from these operational adjustments, noting a reduction in cost per order by 8% compared to 2021, despite industry-wide increases in shipping rates. Furthermore, the company has improved its delivery speed, with over 80% of orders now reaching customers within three business days or less.
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