Why American Eagle’s $350 million deal matters
Supply chain logistics.
Who knew the clunky term could become so sexy and panic-inducing all at the same time?
American Eagle, the $5 billion clothing retailer known for its jeans and staples, it seems, gets it. The publicly-traded business on Tuesday announced that it would acquire Quiet Logistics, a supply chain logistics company, for about $350 million in cash.
With robot-aided fulfillment centers in Jacksonville, Fla.; Dallas, Texas; Los Angeles; St. Louis, Mo., and more, Quiet Logistics helps businesses including American Eagle and Peloton deliver products on the same or the next day—giving brands the ammo to compete with Amazon’s network.
This deal is of importance not only because supply chain bottlenecks and issues are very much top-of-mind at the moment, but it also marks the first time “a specialty retailer like American Eagle Outfitters decided to purchase its own last-mile delivery service,” putting it up against Walmart, Target, and Amazon, per Women’s Wear Daily’s Kellie Ell. This also all comes as retailers are gearing up for the holiday season.
Retailers want control of their own supply chain, and in this case, American Eagle is also seeing an opportunity in continuing to expand Quiet Logistics’ services to other brands and retailers. Looking at it from the ground, the deal could make for a new stream of revenue for American Eagle. Looking at it from the bird’s eye point of view, the deal could also signal a new and surprising crop of potential acquirers for the bevy of logistics companies out there.
Quiet Logistics was previously owned by Related Cos. and property investor Greenfield Partners, who acquired the business in 2019.
RIVIAN: As investors go bananas for electric vehicle maker, Tesla, another company in the space is looking to capture some of that investor sentiment in its IPO. Rivian, backed by Amazon (which holds 22.4% of the business) and Ford (which holds about 14.4%) is now looking to raise about $8.4 billion in a listing of 135 million shares priced between $57 to $62 apiece, per its most recent filing with the Securities and Exchange Commission. While the numbers are still subject to change, the high-end of that range would give it a valuation of about $53 billion—making it more valuable than the likes of Kia and Nissan, and within striking distance of $71 billion Ford. And that’s all for a company that has yet to post a revenue.
The maker of electric SUVs however did begin making deliveries of its pickup truck in September.
Jessica Mathews curated the IPO and SPAC sections of this newsletter.
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