American Eagle and Office Depot discontinue their third-party logistics operations

Major Retailers Retreat from Third-Party Logistics Services

Both American Eagle Outfitters and Office Depot are stepping back from their logistics operations that catered to external clients, casting uncertainty on the sustainability of the supply chain-as-a-service approach for retailers. As a result, many businesses are now seeking alternative fulfillment partners.

American Eagle Outfitters Winds Down Quiet Logistics

American Eagle Outfitters (NYSE: AEO), known for its lifestyle and apparel brands, is in the process of shutting down its Quiet Logistics subsidiary, which specialized in omni-channel fulfillment for other retailers. The company acquired Quiet Logistics in 2021 for $360 million, shortly after purchasing AirTerra, a delivery startup. Initially, these acquisitions helped American Eagle reduce delivery times and manage surplus inventory, prompting the company to offer its logistics services to other brands aiming to compete with industry giants like Amazon, Target, and Walmart.

In a statement to FreightWaves, American Eagle confirmed: “We have decided to close Quiet Logistics and phase out services for third-party clients over the coming months. This move allows us to concentrate on expanding our core lifestyle brands. We are assisting our partners in finding new logistics providers and are committed to supporting our employees during this transition.”

Rumors about Quiet Logistics’ closure began circulating on social media, with clients such as luxury fashion label Perfect Moment and reusable bag maker Baggu reportedly affected.

Industry analysts suggest that managing a separate logistics business for multiple clients conflicted with American Eagle’s primary retail operations. A warning sign appeared a year ago when Quiet Logistics shut down its St. Louis center. The company’s remaining fulfillment centers are located in Boston, Atlanta, Dallas, and Los Angeles.

Matthew Hertz, CEO of Third Person, commented on LinkedIn: “The market is pushing companies to focus on their strengths. American Eagle is returning to prioritizing its own operations. While many retailers once believed they could profit by offering their supply chain as a service, the reality is that balancing third-party logistics with internal needs is extremely challenging.”

Office Depot’s Veyer Logistics to End Third-Party Fulfillment

Veyer, the logistics arm spun off from The Office Depot Corp., is also discontinuing its fulfillment services for external clients. This decision follows Atlas Holdings’ $1 billion acquisition of Office Depot last month, as revealed in a message from Veyer’s business development team.

“Due to strategic changes following Atlas’ acquisition, Veyer will exit the e-commerce fulfillment sector, and our partnership program is being phased out,” a Veyer manager explained. The restructuring will result in significant job losses.

Veyer currently operates 8 million square feet of warehouse space across 40 locations nationwide.

According to a statement from ODP Corp., Veyer will be integrated into the ODP Business Solutions division, which supplies office products in bulk to businesses. The company clarified that Veyer is not being shut down, but rather refocused to support commercial customers and future growth through its logistics and distribution capabilities.

Initial press releases about the acquisition hinted that Veyer would cease providing logistics services to outside companies.

Craig Gunckel, the new CEO of ODP, stated: “Today marks a new era for ODP as a private, more agile company. As we move forward, our focus will be on Office Depot OfficeMax and ODP Business Solutions. With renewed strategy and support from Atlas, we aim to enhance our operations, support our teams, and drive sustainable growth.”

Chris Mortl, a senior account executive at Office Depot, confirmed on LinkedIn that Veyer’s closure is underway and offered to assist affected employees with job referrals.