by SAN FRANCISCO – Bucking the strong headwinds at retail, Banana Republic is making a big move into home furnishings. With this move, the chain is seeking to expand its customer base, “stabilize” the chain post Covid-19 and remake its brand into a more robust lifestyle brand.
The Gap-owned Banana Republic’s new furniture and home décor business, BR Home, had a “soft” start with the introduction of a home textiles collection back in March. Now, in September, it’s moving into the major furniture categories.
Emphasizing casual contemporary in natural, mostly neutral hues and tones, BR Home (and BRHome.com) covers bedroom, living room, dining room and lighting. Materials include solid oak, marble, brass, cotton cashmere and organic cotton.
BR Home product will begin hitting 16 store floors this month, as well as BRHome.com, and in pop-up stores planned for New York City and Los Angeles, according to the company.
Tough sledding
As the Chapter 11 carnage at retail attests, these are most inauspicious times to be launching a home furnishings division and recasting a corporate image. Big-box retailers are rushing to bankruptcy court in dire numbers, with a sizable subset of these representing the home category. Bed Bath & Beyond and Tuesday Morning were abruptly and very recently joined by Mitchell Gold + Bob Williams and Klaussner Home Furnishings.
That’s two more metaphorical black eyes for furniture in the minds of consumers.
While retail added 6,300 jobs in August, that number is less than half of the 13,200 added in July and less than 20% of the windfall 36,700 jobs gained in August a year ago, according to the U.S. Bureau of Labor Statistics.
As Farooq Kathwari, the seemingly ageless CEO of Ethan Allen, told investors last month announcing third-quarter financials, the furniture industry “greatly benefited from the consumer focus on the home during the Covid-19 pandemic and, as expected, consumer focus is now on many other areas.”
Many, many other areas, such as, judging by people’s Facebook and Instagram activity, European vacations and new cars.
The ‘Lifestyle Brand’ playbook
Tearing a page from the RH playbook, BR Home will be almost exclusively contemporary and organized into three lifestyles, or “expressions,” according to the company’s literature: Textured Modern, Classic Chic and a category called Explore.
Textured Modern emphasizes clean lines, smooth finishes, mixed materials and an overall minimalism for modern looks rooted in tradition. Classic Chic also combines traditional with contemporary, seeking “harmony” with its mostly natural hues and earth tones. Banana Republic loyal customers likely will love Explore, which keys on the chain’s expertise in global sourcing. Explore is “rooted in global influences that capture the essence of global artisanal craftsmanship and embroideries,” according to the company’s press release. Explore uses natural materials, earth tones and natural finishes.
Perhaps it should not surprise that Sandra Stangl, president and chief executive officer of Banana Republic, formerly was also president, chief merchandising and new business development officer for Restoration Hardware, now RH. As we reported at the end of last year, RH is well into its own product expansion and refresh, and it is a refresh organized into three lifestyles.
When asked earlier this month by The New York Times whether Banana Republic might enter the hospitality and restaurant industries, as RH has rather audaciously done, Stangl replied, “I think there’s a place for that. We’re dreaming about what travel means to us and to our brand. There’s something there, right?”
Maybe.
Already competing in a crowded clothing and apparel sector, Banana Republic will find itself battling another crowded field at retail, that of furniture retailers. That the field is crowded Banana Republic sees as an opportunity.
“There’s plenty of opportunity for everybody,” Aaron Rose, chief commerce and experience officer, told The New York Times in early September.
BR Home collections
Within the “expressions,” or lifestyle-oriented assortments, BR Home will feature the Stinson, Marquis, Savannah and Phoenix furniture collections, as well as the Atlas Moroccan Rug and Nova lighting collections.
For the Stinson Collection, each upholstered piece is bench-made in North Carolina and Virginia, according to the company, with each frame made with sustainably sourced hardwoods. The Marquis and Savannah contemporary and modern dining collections are made in solid European oak. The Phoenix Collection in Java teak and mahogany features simple, clean shapes and carvings inspired by the wood carvers of the island of Java.
Prices vary across BR Home from $1,250 to $3,450 retail for dining and sofas ranging from $2,650 to $4,950 retail.
Elusive sales stability
Stangl said BR Home hopefully will “stabilize” Banana Republic after a turbulent Covid-19 era of ups and downs.
Banana Republic’s comparable sales fell 8% in the second quarter this year ended July 29, with net sales of $480 million down 11% from the same period a year ago. BR Home joins relatively new divisions BR Baby and BR Athletics that launched 18 months ago, also to expand product categories and, with them, potential consumer bases.
Banana Republic’s net sales dropped 47% in the first quarter of the pandemic, but rebounded in the first quarter of 2022 with a 24% spike as people began returning to in-person work. Stangl said three years of remote and hybrid work inspired people to turn to more flexible apparel, no longer as interested in separate clothes for work and for home.
Prior to Covid-19, Banana Republic already was retrenching, closing 166 stores between 2018 and 2023 and seeking to generate store traffic with steep discounts. In January, the chain ignominiously announced the closing of its flagship store in San Francisco.
Gap, too, is keenly interested in Banana Republic’s foray into furniture. In April this year, the parent company announced layoffs of nearly 2,000, or 9% of its workforce, and Gap stock prices have dropped 16% since Jan. 1.
Founded in 1978 by husband-and-wife team Mel and Patricia Ziegler as a retail and catalog sales business, Banana Republic was acquired by Gap in 1983.
In addition to her leadership experience at Restoration Hardware, Stangl spent 23 years at Williams Sonoma, where she helped launch Pottery Barn Kids and Pottery Barn Teen.
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