Facebook Pinterest Search Icon SourcingJournal_horiz Tumbler Twitter Shape photo-camera graph-trend Shape latest-news icon / user

Here’s Why Banana Republic Weighs Heavy on Gap

Missed Sourcing Journal’s Virtual Sourcing Summit? It's not too late to view all keynotes and panels from the two days. Watch on demand now.

“Your life. Styled.”

This is the motto of Banana Republic, the apparel brand that is currently contributing to Gap Inc.’s declining performance.

In its most recent quarter, the brand’s comparable sales declined 9 percent compared to 4 percent in 2015—its sixth straight quarter of negative growth.

The last seven months have been particularly bad. Same-store sales slipped a massive 17 percent in January, were down 11 percent in February and fell 14 percent in March, before picking up slightly to post a 7 percent decline in April and reverting to an 11 percent decrease in May. June was its best month in a long time—comps only fell by 4 percent—but the brand returned to poor form in July with a 14 percent decline.

These results could be chalked up to an ill-fated facelift. Last year, Banana Republic attempted to become a more fashion-forward brand, sheering away from its well-known sweaters and outerwear, but after poor sales, it reverted to its original classic pieces.

Back in February, Art Peck addressed Banana Republic’s retail woes regarding its female consumers. “We took Banana to a place where we were trying to lead on fashion and trend, and she does not want Banana to be that,” Peck said. “Executives are working on a return to the classics, but sagging sales show that it hasn’t resonated yet with customers.”

As summer comes to a close, many retailers are having sales on their warm-weather merchandise, but Banana Republic’s current promotions aren’t helping its poor performance. Some of Banana Republic’s fall collection is already discounted, in an attempt to recover from its clothing design dilemma, combat declining shopper traffic and hopefully boost up its sales.

Sourcing Journal recently visited a few of the brand’s New York City stores to see first-hand evidence of its mediocre state.

At Banana Republic’s flagship store at 105 Fifth Avenue in the Flatiron District, a sign on one of the front doors said, “Up to 50% off select items.” In the front entrance, another sign near the staircase also alerted customers about the “Now and Later Event,” where items were up to 50 percent off in-store.

Industrial lights hung from the ceiling and soft rock music played in the background. Sales associates were present on the floor, but customer traffic was slightly slow for a Wednesday afternoon. Displays and denim walls were neat throughout, almost as if they were entirely untouched.

A view from the store's staircase.

The view from the Flagship store’s staircase.

In the men’s department, nearly all regular-priced clothing was discounted. Chino pants and denim were 30 percent off. Silk cashmere cotton v-neck pullovers were 50 percent off. Non-iron shirts were 30 percent off and signature pique polos were also 30 percent off.

Men's display at the Flatiron store

Men’s display at Banana Republic’s flagship store.

The women’s section also had heavily discounted apparel. Tops and sweaters were 30 percent off and riley fit shirts were 40 percent off. Tees, tanks and camis were the most discounted apparel on the women’s floor at 50 percent off. No denim or pants were included in the promotions. This store also had a large women’s sale section, where items were an additional 40 percent off.

Banana Republic’s store at 626 Fifth Avenue in Midtown also had fall apparel at discounted prices. At the front entrance, an “Extra 40% off sale” sign was posted. Another nearby advertised the “Now and Later” promotion as well. The décor was more sophisticated but simple, with an emphasis on Banana Republic’s standard workwear. A handful of sales associates were on the floor at the top and lower levels, in addition to a decent traffic flow for a Friday.

Men's display at Banana Republic's Midtown Store

Men’s display at Banana Republic’s Midtown Store

Both men’s and women’s apparel also had the same discounts as the Flatiron store, with some item variation.

In men’s, chinos and denim were 30 percent off. Silk cotton cashmere v-neck sweaters were also 50 percent off. New discounted clothing in men’s included custom 078 wash shirts, which were 40 percent off. In women’s, tops, sweaters and skirts were 30 percent off, in addition to the riley fit shirts which were 40 percent off. Similar to the Flatiron location, this Banana Republic store didn’t include denim or pants in its promotions, except for those in the sale section.

In the Herald Square vicinity, Banana Republic also has another store at 17-19 W. 34th Street. Compared to the Flatiron and Midtown locations, the 34th Street store had the most apparel variety, with some men’s activewear and an expanded women’s petites. There weren’t many sales associates working, but the customer traffic was moderate at 1 p.m. No clothing-specific promotions were advertised at this store, except for extra 40 percent off sale signs located at the front entrance and in sale sections.

Merchandise was neatly organized throughout this store location. At the bottom level, men’s had a core emphasis on various denim styles, in addition to coordinating shirts and chinos throughout. There was a small men’s activewear section in the back, in addition to a clutter-free sales section.

On the top floor, women’s also focused primarily on Banana Republic’s jean collection with matching outfit displays. The women’s petite section also had more clothing available. In the back, the sale section was in okay condition and stuffed with new clothing.

Women's display at Banana Republic's 34th Street store

Women’s display at Banana Republic’s 34th Street store

As Banana Republic gears up for the upcoming fall season, it will remain to be seen how the classic retailer will combat its mediocre performance and grow its consumer base.

Related Articles

More from our brands

Access exclusive content Become a Member Today!