Banana Republic Wants to Outfit Your Home, Too

Inside Banana Republic’s design studio in San Francisco, Sandra Stangl, the corporate’s chief govt, pointed to an merchandise that had been creating buzz in shops.

It was not a shirt or costume draped on a model. As an alternative, Ms. Stangl walked towards a king-size mattress with a parchment-colored backboard. The corporate has began placing these mattress frames, which promote for round $5,000, close to the entrance of its shops in Los Angeles and New York. Sufficient consumers have requested in the event that they had been on the market — the reply: Not but, however Ms. Stangl and her workforce are taking a restricted variety of pre-orders for the autumn.

Customers normally take into consideration outfitting themselves, not their houses, once they stroll into Banana Republic. However the model is attempting to alter that. In March, the retailer introduced it could start promoting residence textiles, and since then it has rolled out gadgets like throw blankets, rugs and the attention-grabbing mattress frames, promoting residence merchandise on-line and in 16 of its shops.

The house class “provides us a much bigger addressable viewers,” Ms. Stangl stated, standing in entrance of an embroidered linen and cotton cover, which the corporate says is a finest vendor. She added that providing residence items “stabilizes out the enterprise a bit bit.”

All through the pandemic, the purchasing surroundings for attire retailers took on a boom-bust sample. Customers caught at residence had been first shopping for yoga pants, then sought work-appropriate garments when a full-scale return to the workplace appeared imminent. Now, as many individuals’s day-to-day lives have settled into extra of a hybrid state of affairs, shoppers are being much more picky about their clothes purchases.

Banana Republic was no stranger to the retail market’s ups and downs. Within the first quarter of the pandemic, the corporate’s internet gross sales dropped 47 p.c. When Ms. Stangl took the highest position, in December 2020, Banana Republic’s design workforce began making apparel that was each versatile and comfy. When it was time to move again to the workplace, consumers turned to the shop for relaxed but skilled apparel. Within the first quarter of 2022, internet gross sales rose 24 p.c.

However after three years of hybrid work, many individuals had been purchasing for work garments much less incessantly and had stopped viewing the garments they wore to work as distinct from the remainder of their wardrobe. Within the first quarter of this 12 months, Banana Republic’s internet gross sales fell 10 p.c.

Even earlier than the pandemic, Banana Republic confronted falling gross sales and struggled to draw clients and not using a 40 p.c markdown. Because it misplaced clients, it started closing shops, going from 566 in 2019 to simply over 400 in January 2023. The identical month, Banana Republic stated it could shutter its two-story flagship in San Francisco, the place its company places of work nonetheless are. It is going to quickly open a smaller flagship location, which is able to promote residence merchandise and a new art collection, obtainable now. The retailer additionally began promoting athletic put on and garments for infants and toddlers.

Banana Republic’s push to promote items past garments isn’t new. It follows a well-recognized playbook from different corporations which have sought to forged themselves as “lifestyle brands” to encourage consumers to purchase into all method of merchandise from them.

Banana Republic is searching for a “long-term technique of constructing model relevance,” Corey Tarlowe, a retail analyst at Jefferies, stated.

“Banana Republic is just not a kind of corporations that you simply consider which might be doing wonderful,” he added. “There’s been so many issues for this Banana Republic enterprise over the past 10 years. They’re attempting to see these alternatives and determine what works.”

The issues are much more acute as a result of its guardian firm, Hole Inc., is in flux. In April, Hole stated it was shedding 1,800 employees, or about 9 p.c of its work power, to avoid wasting $300 million. A month later, the corporate stated gross sales in any respect of its manufacturers, which additionally embody Previous Navy and Athleta, had declined in the latest quarter. Hole’s inventory has decreased 16 p.c because the begin of the 12 months, and the retailer has been and not using a everlasting chief govt for a 12 months.

Altering the notion of a retailer amongst consumers is just not simple. Marcela Diaz swung by one in all Banana Republic’s San Francisco shops on a latest Wednesday afternoon to take a look at some garments, holding a bag from Zara that contained a pair of silk pants.

Ms. Diaz, a self-described informal dresser, stated that popping out of the pandemic, Banana Republic got here to thoughts when she was searching for attire applicable for skilled conferences.

“As I’ve gone again to work, I’ve been purchasing extra with Banana Republic on-line,” stated Ms. Diaz, who works at a nonprofit in Santa Fe, N.M., and left the shop with out making a purchase order.

Whereas some consumers and even Ms. Stangl see the time period “work put on” as passé, Banana Republic nonetheless has a devoted part on its web site referred to as “The Workwear Edit.”

Angela Department, a 39-year-old working at a college in Chicago, was additionally drawn to Banana Republic’s on-line retailer. She stated she had at all times considered its garments as “enterprise enterprise” however purchased a light-weight cashmere sweater and utility pants as a result of they labored effectively for each the workplace and weekend brunch.

Earlier than the pandemic, she used to have a bit in her closet devoted to work put on, and she or he incessantly added to it. However now her garments must be extra versatile, she stated, and issues in regards to the financial system have curbed her spending much more.

“I’ve positively slowed up so much as a result of I don’t actually need something,” Ms. Department stated.

However Banana Republic’s nascent residence décor line, she stated, may make her need to hold spending there.

Eric Ford, a 30-year-old working in advertising in New York, echoed that sentiment. His mom launched him to Banana Republic when he was youthful, however till lately, the model had felt irrelevant to him. The push to promote décor and furnishings comes at a time in his life and profession when he’s able to put cash towards these sorts of purchases.

“I actually advised myself 30 is the time the place, like, all my cash goes to my closet, my residence and me touring,” Mr. Ford, who lives in Brooklyn, stated.

Analysts are nonetheless skeptical that Banana Republic’s residence items technique will discover widespread success. The corporate is up in opposition to the extra established companies of Ralph Lauren, H&M, Zara and Restoration {Hardware}. (Ms. Stangl, Banana Republic’s chief govt, was as soon as the chief service provider at Restoration {Hardware}.)

“You’re not going to be Restoration {Hardware} by any means,” stated Liza Amlani, the founding father of Retail Technique Group, a consulting agency. “Banana has numerous competitors, and they need to simply actually scrap that entire concept” and stay centered on clothes, she added.

Aaron Rose, Banana Republic’s chief commerce and expertise officer, stated there was room for the retailer to succeed, noting that no firm has greater than 5 p.c of the house market and that “there’s loads of alternative for everyone.”

And if the house enterprise proves to be a hit, Banana Republic has different concepts.

“Can we see ourselves going into hospitality? Positive. And eating places? I feel there’s a spot for that,” Ms. Stangl stated. “We’re dreaming about what journey means to us and to our model. There’s one thing there, proper?”