US clothing retailer American Eagle has announced a new growth strategy, which is set to run for the next three years, after writing off US$94 million (£73.4m) in impairment charges related to its internal logistics arm, Quiet Platform.
An impairment charge refers to assets whose value decreases or is lost entirely, and the process by which companies write off these assets.
Last year, the apparel company acquired two logistics start-ups to advance its development of an open marketplace for retailers to share warehouse space, delivery trucks and other logistics resources.
The company suggested this internal business could one day be more profitable than its retail segment.
Its holiday earnings in 2023 beat predictions from Wall Street due to growth in demand and a reduction in both markdowns and input costs.
The platform was established to streamline American Eagle’s internal shipping requirements. This branch then developed into its own business, which the company hopes can serve as a global logistics marketplace for other companies.
During Q4 2023, American Eagle saw US$98.3m (£76.8m) in impairment charges related to Quiet Platforms, which included more than US$4m (£3.1m) in employee severance costs.
In this same quarter, the retailer restructured to help meet the targets of its new business objectives, especially those related to the development of a network of regionalised fulfilment centres.
It reported that these changes are expected to generate US$20m (£15.6m) in annual savings, starting in 2024.
