Banana Republic wants to outfit your home, too

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Banana Republic wants to outfit your home, too
The Banana Republic studio in San Francisco, on June 30, 2023. The retailer has shifted its strategy to sell furniture and artwork. (Jim Wilson/The New York Times)

by Jordyn Holman

SAN FRANCISCO, CALIF.- Inside Banana Republic’s design studio in San Francisco, Sandra Stangl, the company’s chief executive, pointed to an item that had been creating buzz in stores.

It was not a shirt or dress draped on a mannequin. Instead, Stangl walked toward a king-size bed with a parchment-colored backboard. The company has started putting these bed frames, which sell for around $5,000, near the front of its stores in Los Angeles and New York. Enough shoppers have asked if they were for sale — the answer: Not yet, but Stangl and her team are taking a limited number of pre-orders for the fall.

Shoppers usually think about outfitting themselves, not their homes, when they walk into Banana Republic. But the brand is trying to change that. In March, the retailer announced it would begin selling home textiles, and since then it has rolled out items like throw blankets, rugs and the attention-grabbing bed frames, selling home products online and in 16 of its stores.

The home category “gives us a bigger addressable audience,” Stangl said, standing in front of an embroidered linen and cotton duvet, which the company says is a best seller. She added that offering home goods “stabilizes out the business a little bit.”

Throughout the pandemic, the shopping environment for apparel retailers took on a boom-bust pattern. Shoppers stuck at home were first buying yoga pants, then sought work-appropriate clothes when a full-scale return to the office seemed imminent. Now, as many people’s day-to-day lives have settled into more of a hybrid situation, consumers are being even more choosy about their clothing purchases.

Banana Republic was no stranger to the retail market’s ups and downs. In the first quarter of the pandemic, the company’s net sales dropped 47%. When Stangl took the top role, in December 2020, Banana Republic’s design team started making attire that was both versatile and comfortable. When it was time to head back to the office, shoppers turned to the store for relaxed yet professional attire. In the first quarter of 2022, net sales rose 24%.

But after three years of hybrid work, many people were shopping for work clothes less frequently and had stopped viewing the clothes they wore to work as distinct from the rest of their wardrobe. In the first quarter of this year, Banana Republic’s net sales fell 10%.

Even before the pandemic, Banana Republic faced falling sales and struggled to attract customers without a 40% markdown. As it lost customers, it began closing stores, going from 566 in 2019 to just over 400 in January 2023. The same month, Banana Republic said it would shutter its two-story flagship in San Francisco, where its corporate offices still are. It will soon open a smaller flagship location, which will sell home products and a new art collection, available now. The retailer also started selling athletic wear and clothes for babies and toddlers.

Banana Republic’s push to sell goods beyond clothes isn’t new. It follows a familiar playbook from other companies that have sought to cast themselves as “lifestyle brands” to inspire shoppers to buy into all manner of products from them.

Banana Republic is looking for a “long-term strategy of building brand relevance,” said Corey Tarlowe, a retail analyst at Jefferies.

“Banana Republic is not one of those companies that you think of that are doing amazing,” he added. “There’s been so many problems for this Banana Republic business over the last 10 years. They’re trying to see these opportunities and figure out what works.”

The problems are even more acute because its parent company, Gap Inc., is in flux. In April, Gap said it was laying off 1,800 workers, or about 9% of its workforce, to save $300 million. A month later, the company said sales at all of its brands, which also include Old Navy and Athleta, had declined in the most recent quarter. Gap’s stock has decreased 16% since the start of the year, and the retailer has been without a permanent chief executive for a year.

Still, changing the perception of a store among shoppers is not easy. Marcela Diaz swung by one of Banana Republic’s San Francisco stores on a recent Wednesday afternoon to check out some clothes, holding a bag from Zara that contained a pair of silk pants.

Diaz, a self-described casual dresser, said that coming out of the pandemic, Banana Republic came to mind when she was looking for apparel appropriate for professional meetings.

“As I’ve gone back to work, I’ve been shopping more with Banana Republic online,” said Diaz, who works at a nonprofit in Santa Fe, New Mexico, and left the store without making a purchase.

While some shoppers and even Stangl see the term “work wear” as passe, Banana Republic still has a dedicated section on its website called “The Workwear Edit.”

Angela Branch, a 39-year-old working at a university in Chicago, was also drawn to Banana Republic’s online store. She said she had always thought of its clothes as “business business” but bought a lightweight cashmere sweater and utility pants because they worked well for both the office and weekend brunch.

Before the pandemic, she used to have a section in her closet dedicated to work wear, and she frequently added to it. But now her clothes need to be more versatile, she said, and concerns about the economy have curbed her spending even more.

“I’ve definitely slowed up a lot because I don’t really need anything,” Branch said.

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

Eric Ford, a 30-year-old working in marketing in New York, echoed that sentiment. His mother introduced him to Banana Republic when he was younger, but until recently, the brand had felt irrelevant to him. The push to sell décor and furniture comes at a time in his life and career when he’s ready to put money toward those kinds of purchases.

“I literally told myself 30 is the time where, like, all my money is going to my closet, my home and me traveling,” said Ford, who lives in Brooklyn.

Analysts are still skeptical that Banana Republic’s home goods strategy will find widespread success. The company is up against the more established businesses of Ralph Lauren, H&M, Zara and Restoration Hardware. (Stangl, Banana Republic’s CEO, was once the chief merchant at Restoration Hardware.)

“You’re not going to be Restoration Hardware by any means,” said Liza Amlani, the founder of Retail Strategy Group, a consulting firm. “Banana has a lot of competition, and they should just really scrap that whole idea” and remain focused on clothing, she added.

Aaron Rose, Banana Republic’s commerce and experience officer, said there was room for the retailer to succeed, noting that no company has more than 5% of the home market and that “there’s plenty of opportunity for everybody.”

And if the home business proves to be a success, Banana Republic has other ideas.

“Do we see ourselves going into hospitality? Sure. And restaurants? I think there’s a place for that,” Stangl said. “We’re dreaming about what travel means to us and to our brand. There’s something there, right?”

This article originally appeared in The New York Times.

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