Inside Banana Republic’s design studio in San Francisco, Sandra Stangl, the company’s chief executive, showed off an item that created a buzz in stores.
It wasn’t a shirt or dress draped on a mannequin. Instead, Ms. Stangl walked over to a king-size bed with a parchment-colored shield. The company began placing these bed frames, which sell for about $5,000, near the front of its stores in Los Angeles and New York. Quite a few shoppers have asked if they are for sale – the answer: Not yet, but Mrs. Stangl and her team are taking a limited number of pre-orders for the fall.
Shoppers usually think about furnishing 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 start selling home textiles, and since then it has rolled out items such as throws, rugs and the eye-catching bed frames, selling home products online and in 16 of its stores.
The home category “gives us a larger addressable audience,” Ms. Stangl said, standing in front of an embroidered linen and cotton blanket that the company says is a top seller. She added that offering home goods “stabilizes the business a little bit.”
During the pandemic, the shopping environment for apparel retailers has taken on a boom-and-bust pattern. Shoppers stuck at home bought yoga pants first, then looked for work-appropriate clothes when a full-scale return to the office seemed imminent. Now, as many people’s daily lives have settled into a more hybrid situation, consumers are even more selective about their clothing.
Banana Republic was no stranger to the ups and downs of the retail market. In the first quarter of the pandemic, the company’s net sales fell by 47 percent. When Ms. Stangl took the lead role, in December 2020, Banana Republic’s design team began making clothes that were both versatile and comfortable. When it was time to head back to the office, shoppers turned to the store for casual but professional clothing. In the first quarter of 2022, net sales rose 24 percent.
But after three years of hybrid work, many people shopped for work clothes less often and stopped viewing the clothes they wore to work as different from the rest of their wardrobe. In the first quarter of this year, Banana Republic’s net sales fell 10 percent.
Even before the pandemic, Banana Republic faced declining sales and struggled to attract customers without a 40 percent discount. As it lost customers, it began closing stores, going from 566 in 2019 to just over 400 in January 2023. That same month, Banana Republic said it would close its two-story flagship in San Francisco, where its corporate offices remain. It will soon open a smaller flagship location that will sell household products and a new art collection, available now. The retailer also started selling sportswear and clothing for babies and toddlers.
Banana Republic’s push to sell merchandise beyond clothing is not new. It follows a familiar playbook of other companies that have sought to cast themselves as “lifestyle brands” to inspire shoppers to buy all kinds of products from them.
Banana Republic is looking for a “long-term strategy to build brand relevance,” said Corey Tarlowe, retail analyst at Jefferies.
“Banana Republic is not one of those companies that you think of that does amazing things,” he added. “There have 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 percent of its workforce, to save $300 million. A month later, the company said sales of all its brands, which also include Old Navy and Athleta, were down in the most recent quarter. Gap shares are down 16 percent since the start of the year, and the retailer has been without a permanent chief executive for a year.
Changing the perception of a store among buyers 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, clutching a Zara bag that contained silk pants.
Ms. Diaz, a self-described casual dresser, said that coming out of the pandemic, Banana Republic came to mind when she was looking for clothes appropriate for professional meetings.
“When I went back to work, I shopped more with Banana Republic online,” said Ms. Diaz, who works at a nonprofit in Santa Fe, NM, and left the store without making a purchase.
While some shoppers and even Ms. Stangl see the term “workwear” as passé, Banana Republic still has a dedicated section on its website called “The Workwear Editor.”
Angela Branch, a 39-year-old working at a university in Chicago, was also drawn to Banana Republic’s online store. She said she always thought of its clothes as “business-as-usual” but bought a light 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 clothes, and she often added to it. But now her clothes need to be more versatile, she said, and worries about the economy have curbed her spending even more.
“I must have slowed down a lot because I really need anything,” Ms Branch said.
But Banana Republic’s nascent home decor line, she said, might encourage her 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 felt irrelevant to him. The push to sell decor and furniture comes at a time in his life and career when he is willing to put money down for such purchases.
“I literally told myself that 30 is the time where, like, all my money goes to my closet, my home and I travel,” said Mr. 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. (Ms. Stangl, Banana Republic’s chief executive, was once the chief merchandiser at Restoration Hardware.)
“There’s no way you’re going to be Restoration Hardware,” said Liza Amlani, the founder of Retail Strategy Group, a consulting firm. “Banana has a lot of competition, and they should really get rid of that whole idea” and stay focused on clothing, she added.
Aaron Rose, Banana Republic’s chief business and experience officer, said there is room for the retailer to succeed, noting that no one company has more than 5 percent of the domestic market and that “there’s a lot of opportunity for everyone.”
And if the home business proves to be successful, Banana Republic has other ideas.
“Do we see ourselves getting into hospitality? Certainly. And restaurants? I think there is a place for that,” Ms. Stangl said. “We dream about what travel means to us and to our brand. Is there something there?”