American Eagle Chief Tries to“Uber-ize” Supply Chain
Date
4/22/2022 10:18:32 AM
(MENAFN- Baystreet.ca)
American Eagle Chief Tries to“Uber-ize” supply chain
American Eagle Outfitters (NYSE:AEO) wants to master a business function that became critical for retailers during the COVID-19 pandemic: the supply chain.
Shekar Natarajan joined the apparel retailer roughly three-and-a-half years ago, and since the company has acquired two supply chain businesses for hundreds of millions of dollars and began swiftly building out a logistics platform that others companies — even its rivals in the apparel industry — can utilize, too.
It's a bet that American Eagle can lead the industry into a new territory of vertical logistics and dilute costs. Its peers will either emulate the model and play catchup, or lean on American Eagle long term.
American Eagle's goal, according to Natarajan, is to“Uber-ize” the global supply chain, thereby making it a shared service for retailers. His belief is that brands that compete for shoppers in clothing, makeup or home goods shouldn't also be competing over things like quicker delivery windows and cardboard boxes.
Instead, if enough businesses work together and pool resources, a conglomerate of retailers could be shipping out just as many packages daily as Seattle-based e-commerce behemoth Amazon, and hopefully at a profit, Natarajan explained in a recent sit-down interview.
He calls American Eagle's communal supply chain platform the ultimate“frenemy network.”
“The only way that you could actually have Amazon-like scale, Amazon-like costs and Amazon-like capabilities — you have to share,” said Natarajan.
AEO shares ended Thursday at $17.00.
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