Business

Banana Republic Wants to Outfit Your Home, Too

Inside the Banana Republic design studio in San Francisco, the company’s chief executive officer, Sandra Stangle, points to a hot item in the store.

It wasn’t a shirt or dress on a mannequin. Instead, Mr. Stangl walked toward a king-sized bed with a parchment-colored backboard. The company has started placing these bed frames, which sell for about $5,000, near the front of its stores in Los Angeles and New York. Many shoppers asked if it would go on sale, but the answer was, “Not yet, but Stangl and her team are taking pre-orders for the fall in limited quantities.”

Shoppers typically think about dressing themselves rather than home when they step into Banana Republic. But this brand is trying to change that. The company announced it would begin selling home textiles in March, and since then has sold comfort products such as throw blankets, rugs and high-profile bed frames, selling home products online and in 16 stores.

Standing in front of the company’s best-selling embroidered linen and cotton duvets, Mr. Stangl said the home category “gives us a wider audience.” She added that providing household items “makes the business a little more stable.”

The shopping environment for apparel retailers followed a boom-bust pattern during the pandemic. Homebound shoppers first bought yoga pants and then looked for work-appropriate clothes as a return to the full-blown office seemed imminent. Consumers are becoming more cautious about their clothing purchases as many people’s daily lives have now settled into a more hybrid situation.

Banana Republic has not been immune to the ups and downs of the retail market. In the first quarter of the pandemic, the company’s net sales fell 47%. With Ms. Stangl assuming the lead role in December 2020, the Banana Republic design team began creating versatile and comfortable clothing. When it was time to head back to the office, shoppers headed to the stores for relaxed yet professional attire. Net sales in the first quarter of 2022 he increased by 24%.

But after three years of hybrid work, many people buy work clothes less frequently and no longer see the clothes they wear to work as separate from the rest of their wardrobe. In the first quarter of this year, Banana Republic’s net sales were down 10%.

Even before the pandemic, Banana Republic was facing declining sales and struggled to attract customers without a 40% price drop. As the number of customers decreased, it began closing stores, increasing from 566 stores in 2019 to over 400 stores in January 2023. That same month, Banana Republic announced that it would close its two-story flagship store in San Francisco, where it is still headquartered. The company plans to open a small flagship store that sells household products and miscellaneous goods in the near future. new art collection, is currently available. The retailer has also started selling sportswear and clothing for toddlers.

Banana Republic’s drive to sell non-apparel products is nothing new. This follows the familiar strategy of other companies to position themselves as “lifestyle brands” to encourage shoppers to purchase the company’s full range of products.

Jefferies retail analyst Corey Tarlow said Banana Republic is looking for a “long-term strategy to build brand relevance.”

“Banana Republic is not one of the great performing companies you might imagine,” he added. “There have been so many problems with this Banana Republic business over the last 10 years.

The problem is exacerbated by the volatility of its parent company, Gap. Gap said in April that it would lay off 1,800 people, about 9% of its workforce, to save $300 million. A month later, the company announced that sales of all its brands, including Old Navy and Athleta, had declined in the most recent quarter. Gap shares have fallen 19% since the start of the year, and the retailer has been without a permanent chief executive for a year.

Still, changing the perception of stores among shoppers isn’t easy. Marcela Diaz stopped by Banana Republic’s San Francisco store to check out her outfit on a recent Wednesday afternoon with a ZARA bag containing silk pants.

Diaz, a self-professed casual dresser, said Banana Republic came to mind when she was looking for appropriate attire for professional meetings after the pandemic.

“I’ve been shopping more online at Banana Republic since I got back to work,” said Ms. Diaz, who works at a nonprofit in Santa Fe, New Mexico, before leaving the store without buying anything.

Although some shoppers and even Stangl consider the term “workwear” obsolete, the Banana Republic website still has a dedicated section called “The Workwear Edit.”

Angela Branch, 39, a college student in Chicago, was also drawn to Banana Republic’s online store. She said she always thought of the company’s clothing as “business,” but she bought the lightweight cashmere sweater and utility pants because they’re suitable for both the office and weekend brunch.

Before the pandemic, she had a section of her closet dedicated to work clothes, which she frequently added to. But now her clothes need to be more versatile, and economic concerns are further curbing her spending, she said.

“I’m pretty sure it slowed me down a lot because I didn’t really need anything,” Branch said.

But Banana Republic’s nascent home decor line could make her want to continue spending there, she said.

Eric Ford, 30, who works in marketing in New York, agrees. His mother introduced him to Banana Republic when he was young, but until recently he felt the brand was irrelevant. The desire to sell decorations and furniture came at a point in his life and career when he was ready to fund those kinds of purchases.

“At 30, I literally told myself this was the time when all my money would be spent on closets, homes and travel,” said Ford, who lives in Brooklyn.

Analysts remain skeptical that Banana Republic’s home products strategy will be broadly successful. The company faces more established businesses like Ralph Lauren, H&M, Zara and Restoration Hardware. (He is the CEO of Banana Republic, Mr. Stangl, who was once the Chief Marketing Officer of Restoration Hardware.)

“It’s never going to be restorative hardware,” says Riza Amrani, founder of consulting firm Retail Strategy Group. “Banana has a lot of competition. You should really scrap the whole idea,” she added, continuing to focus on clothing.

Aaron Rose, Banana Republic’s chief marketing officer, said no company had more than a 5% share of the domestic market, and that “there’s plenty of opportunity for everyone,” noting that the retailer will be successful. said there was room for

And if the home business succeeds, Banana Republic has another idea.

“Do you think we’ll be in hospitality? Sure. And restaurants? I think there’s room for that,” Stangl said. “We dream about what travel means to us and our brand. There’s something there, right?”

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