Two Major Retailers Abandon Third-Party Logistics Ambitions
American Eagle Outfitters is pulling the plug on Quiet Logistics just three years after acquiring the omni-channel fulfillment provider for $360 million, signaling a broader retreat by retailers from the third-party logistics business. The decision, confirmed by AEO to FreightWaves, comes as Office Depot is simultaneously winding down its own 3PL operations, raising serious questions about the viability of supply chain-as-a-service models for retail companies.
"American Eagle Outfitters, Inc. has made the decision to close its wholly-owned Quiet Logistics business and discontinue services for third-party customers over the next several months," the company stated. "This strategic decision will enable AEO to prioritize growth and focus on its portfolio of leading lifestyle brands."
The timing is particularly jarring for Quiet's clients, which include luxury fashion brand Perfect Moment and reusable bag maker Baggu. AEO says it's helping customers transition to new providers "where able," but news of the shutdown first surfaced through unsubstantiated social media posts over the weekend before the official confirmation.
The Retail-to-3PL Experiment Unravels
When AEO acquired Quiet Logistics in 2021—shortly after buying delivery startup AirTerra—the strategy seemed sound: leverage internal logistics capabilities built to compete with Amazon, Target, and Walmart, then monetize that infrastructure by serving other brands. After achieving reduced delivery times and better inventory management for its own operations, AEO opened those capabilities to outside customers.
But the simultaneous exits by both American Eagle and Office Depot suggest that running a competitive 3PL operation requires a fundamentally different business model than retail. While retailers can build sophisticated supply chains for their own needs, scaling those operations to serve diverse customers with varying requirements apparently presents challenges that outweigh the revenue opportunities.
For established 3PLs, these shutdowns represent both opportunity and validation. The displaced customers will need new homes, but the failed experiments also confirm that logistics services isn't a market retailers can simply enter by opening up their existing infrastructure. The complexity of managing multiple clients, each with unique SKUs, seasonality patterns, and service requirements, demands specialized expertise that doesn't automatically transfer from retail operations.
