Staff Cuts Hit American Eagle’s Quiet Platforms Unit
American Eagle Outfitters’ supply chain strategy has hit a speed bump.
AEO is reducing the size of the workforce at its Quiet Platforms logistics unit due to macro headwinds and Quiet Platform’s failure to meet certain of its business plans.
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Among those departing from Quiet Platforms is Shekar Natarajan, president of Quiet Platforms, who has also been leading the Quiet Platforms and AirTerra logistics businesses which are both owned by American Eagle Outfitters. At one time, Natarajan also held the title of executive vice president and chief supply chain officer at American Eagle Outfitters. This year, there is a long list of retailers, tech firms and banks that have triggered cuts, including Saks, J. Crew Group, Kohl’s and others.
Responding to a media report of the changes at Quiet Platforms, American Eagle Outfitters issued a statement Tuesday indicating, “While Quiet’s third party business has grown nicely, it has not achieved the plans we envisioned. As a result, we must pull back on expenses to reset the business. This is necessary to improve profitability, particularly given prevailing macro headwinds….We are reducing the size of the Quiet workforce to be more in line with the current business trend….This decision was not made lightly, and we realize this will impact the lives of affected employees. We will provide them a variety of transition benefits.”
American Eagle Outfitters also stated that it is “committed to the continued transformation of our supply chain, and Quiet Platforms plays an important role in that strategy as we work to achieve increased profitability. Over the past few years Quiet has been tremendously beneficial to AEO, providing much needed distribution and fulfillment capacity to grow our industry-leading brands.”
The company did not indicate how many Quiet Platforms employees would lose their jobs. Quiet Logistics has locations in Los Angeles, Dallas, St. Louis and Jacksonville that provide same-day and next-day delivery options to consumers and stores. The company provides fulfillment, transportation and digital services, and indicates on its website that it delivers over 50 million parcels annually with a 95 percent on-time delivery rate.
Regarding Natarajan’s departure, AEO stated, “Due to the changes within the Quiet Platforms organization, Shekar Natarajan has decided to exit the business, which is effective immediately. AEO appreciates Shekar’s contributions as we have worked to develop strong, more innovative supply chain capabilities.”
Niall Murphy will assume interim operational oversight and responsibility for Quiet. “We believe Niall and the support of our experienced leadership team will continue to drive the business forward,” AEO indicated in its statement.
AEO added, “We believe Quiet will continue to deliver results for AEO, and over time has the potential to be a meaningful and profitable third party logistics provider. With the support of our experienced leadership team, we remain focused on driving the business forward.”
American Eagle Outfitters, parent company to the American Eagle, Aerie, Offline by Aerie, Todd Snyder and Unsubscribed brands, has been working to transform its supply chain to create greater agility, speed and diversification for its own operations as well as providing logistics services to other brands and retailers.
In August 2021, the company acquired AirTerra, the logistics firm founded by former Nordstrom chief supply chain officer Brent Beabout, for an undisclosed amount. The move was meant to help the retailer leverage its network of stores and distribution centers to fill orders faster and offer same-day services. It was also the first time a specialty retailer like American Eagle Outfitters decided to purchase its own last-mile delivery service, enabling it to compete with the big three mass-channel merchants — Amazon Inc., Walmart Inc. and Target Corp, all of which already have their own last-mile delivery services in place — in terms of same-day and last-mile delivery.
In November 2021, AEO furthered its supply chain capabilities by purchasing Quiet Platforms for $350 million in cash.
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