Dive Brief:

• American Eagle will acquire Quiet Logistics for $350 million in cash in an ongoing move to transform its supply chain, the company announced in a press release on Tuesday. The deal is expected to close before the end of 2021.
• Quiet Logistics will continue to operate independently and offer in-market fulfillment services for other consumer brands as well. The company has centers operating in Boston, Chicago, Los Angeles, Dallas, St. Louis and Jacksonville, Florida, and provides same-day and next-day delivery to customers and stores.
• "An important pillar of our strategy is transforming our supply chain to create greater agility, speed and diversification," said Jay Schottenstein, executive chairman and CEO at American Eagle.

Dive Insight:

American Eagle's acquisition of Quiet Logistics furthers the retailer's control over its supply chain — a priority American Eagle executives have put forth to investors and analysts.

"Supply chain transformation has been a huge focus for us," Michael Rempell, chief operating officer said in a Q2 earnings call in September. "We're very focused on controlling everything that we can and there's a lot that's within our control."

American Eagle is achieving that control via acquisitions. The acquisition of Quiet Logistics follows American Eagle's purchase of third-party logistics company AirTerra. Both moves put American Eagle in a position where it now has logistical expertise at its fingertips.

American Eagle's latest acquisition was a "very smart proactive move, " Jason Murray, CEO of Shipium said in an email. It gives the retailer "a fighting chance to meet consumer expectations around free and fast shipping during the holidays."

The retailer has been on a journey to enable fast fulfillment and delivery for its customers, reducing the number of SKUs and opening multiple distribution centers.

The acquisition also allows American Eagle to tap Quiet Logistics' automation expertise. The company is behind Locus Robotics, which develops warehouse robots that can transport goods to be packed and shipped. Locus was spun-off in 2015, though Quiet is still active in automation, opening a robot-enabled fulfillment center in Los Angeles in 2019.

Schottenstein said during the September earnings call that early investments in logistics, including the prior AirTerra acquisition, have already lowered costs and generated efficiencies.

"I don't know another retailer who can make that statement that their cost of getting the goods to their stores [is] less than it was before with all the current costs today," he said.

More logistics-related acquisitions are in American Eagle's near future. During the September call, an analyst asked Schottenstein about whether the CEO sees "other acquisitions coming into the fold going forward that would continue to enhance your logistics abilities."

"About the acquisitions, yes," Schottenstein said in response. "We are working on something. I can't go into details. But there'll be announcement probably next couple of months."

Shefali Kapadia and Sarah Zimmerman contributed to this story.