Banana Republic also wants to equip your home

Inside San Francisco’s Banana Republic design studio, the company’s CEO, Sandra Stangl, points out an item that’s been causing a buzz in stores.

It was not a shirt or dress worn on a mannequin. Instead, Mrs. Stangl walked toward a king-size bed with a vellum-colored headboard. The company has started placing these bed frames, which retail for about $5,000, near its storefronts in Los Angeles and New York. Enough shoppers have asked if it’s on sale—the answer: Not yet, but Ms. Stangl and her team are taking a limited number of pre-orders in the fall.

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

Standing in front of an embroidered linen and cotton quilt, Mrs. Stangl said the home class “gives us a more addressable audience.” The home goods offering “is stabilizing the business a little bit,” she added.

Throughout the pandemic, the shopping environment for apparel retailers has taken a boom-and-bust pattern. Shoppers stuck at home first bought yoga pants, then sought out work-appropriate clothing when a full return to the office seemed imminent. Now, as many people’s daily lives have settled into a hybrid mode, consumers are becoming more choosy about their clothing purchases.

Banana Republic was no stranger to the vagaries of the retail market. In the first quarter of the pandemic, the company’s net sales fell 47 percent. When Ms. Stangl took over, in December 2020, the design team at Banana Republic set out to create clothing that was both versatile and comfortable. When it came time to head back to the office, shoppers turned to the store for comfortable, professional clothing. In the first quarter of 2022, net sales increased by 24 percent.

But after three years of the work hybrid, many people have been shopping for work clothes less frequently and have stopped seeing the clothes they wear 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% cut. As it lost customers, it began closing stores, from 566 in 2019 to just over 400 in January 2023. That same month, Banana Republic said it would close its two-story flagship store in San Francisco, where the company’s offices still stand. Soon to open a smaller flagship location, which will sell household products and New art group, is available at present. The retailer also began selling infant and toddler apparel and sportswear.

Banana Republic’s attempt to sell goods other than clothing is nothing new. It follows a familiar playbook from other companies that have sought to position themselves as “lifestyle brands” to inspire shoppers to buy all kinds of products from them.

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

“Banana Republic isn’t one of those companies that think they’re doing amazing,” he added. “There have been a lot of problems for Banana Republic’s business over the past 10 years. They are trying to see these opportunities and see what works.”

The problems are even more acute because the parent company, Gap Inc. , is in constant flux. In April, Gap said it would lay off 1,800 workers, or about 9 percent of its workforce, to save $300 million. A month later, the company said sales across all of its brands, which also include Old Navy and Athleta, fell last quarter. Gap’s stock is down 19 percent since the start of the year, and the retailer has been without a permanent CEO for a year.

However, changing store perception among shoppers is not easy. Marcela Diaz swung by a Banana Republic store in San Francisco last Wednesday afternoon to check out some clothes, toting a Zara bag containing silk leggings.

Emerging from the pandemic, Ms. Diaz, who describes herself as a casual wear designer, said Banana Republic came to the fore when she was looking for the right clothes for professional meetings.

“After returning to work, I shopped more with Banana Republic online,” said Ms. Diaz, who works for a nonprofit in Santa Fe, New Mexico, and left the store without making a purchase.

While some shoppers and even Ms. Stangl see “workwear” as a pass-term, Banana Republic still has a dedicated section on their website called “The Workwear Edit.”

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

Before the pandemic, she had a section of her closet devoted to work clothes, and she often added to it. But now her clothing needs to be more diverse, she said, and concerns about the economy have limited her spending further.

“I’ve certainly slowed down a lot because I don’t really need anything,” said Mrs. Branch.

But Banana Republic’s fledgling home decor line, she says, might make her want to keep spending there.

Eric Ford, a 30-year-old marketing executive in New York, echoed that sentiment. His mom 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’s ready to put money into these types of purchases.

“I’ve literally told myself 30 is the time when, like, all my money goes into my closet, my house and I travel,” said Mr. Ford, who lives in Brooklyn.

Analysts remain skeptical that Banana Republic’s home goods strategy will achieve widespread success. The company fronts more established companies such as Ralph Lauren, H&M, Zara, and Restoration Hardware. (Ms. Stangl, CEO of Banana Republic, was once the chief marketing officer for Restoration Hardware.)

“You’re not going to restore hardware by any means,” said Lisa Amlany, founder of Retail Strategy Group, a consulting firm. She added, “Bananas have a lot of competition, and they really should get rid of that whole idea” and focus on the clothes.

There’s room for the retailer to succeed, said Aaron Rose, Banana Republic’s chief marketing officer, noting that no company has more than 5 percent of the domestic market and that “there’s a lot of opportunity for everyone.”

And if working from home proves to be a success, Banana Republic has other ideas.

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