American Eagle is becoming more than a fashion company as the shipping and logistics side of its business continues to expand.
What began with the purchase of the shipping startup AirTerra in August 2021 has now evolved into a full-fledged, revenue-driving wing of the company. In December 2021, American Eagle Outfitters acquired Quiet Logistics, a company that operates fulfillment centers and warehouses around the country, and reorganized AirTerra and Quiet Logistics under the umbrella name Quiet Platforms. On Tuesday, AEO announced a partnership between Quiet Platforms and the mail carrier company Pitney Bowes.
Quiet Platforms can already handle shipping from suppliers to warehouses through the existing infrastructure, but with the addition of Pitney Bowes, American Eagle will also be able to facilitate last-mile delivery from warehouses to consumers. According to Brent Beabout, president of Quiet Platforms, this was the last piece of the puzzle that would allow the company to “enable faster delivery services and logistics capabilities to get orders into the hands of customers quicker and more efficiently.”
“Offering in-network retailers and brands access to our expansive logistics capabilities enables [the retailers] to focus more closely on what they do best,” Beabout said.
Since December, American Eagle has offered the services of Quiet Platforms to other brands. Currently, more than 60 companies, including Kohl’s, Steve Madden and Peloton, are using its infrastructure. While small, this side of the business is swiftly making an impact. In its last earnings report on May 26, American Eagle revealed that Quiet Platforms added three percentage points to its net revenue growth, which came out to a 2% growth in the first quarter of 2022. In other words, without the money from Quiet Platforms, net revenue would have been -1% for the quarter.
While American Eagle’s foray into shipping and logistics began only as a way for it to improve its delivery times — American Eagle has delivered 35% faster since the acquisitions — executives at the company say they hope Quiet Platforms will be a moneymaker on its own.
In March, Mike Mathias, chief financial officer of American Eagle, said on the company’s first-quarter earnings call, “We are very excited about the Quiet acquisition, including the benefits it brings to our brands and the long-term growth potential of the third-party business.”
Necessity often breeds invention, and the last year has led to many companies in the fashion industry rethinking shipping and delivery. As a result, Skims launched autonomous robots in its fulfillment centers and Walmart chartered ships to move products. Like American Eagle, Walmart has also turned its internal shipping logistics tools into extra revenue streams by offering them to other companies.
