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How Banana Republic Became a Bright Spot in Gap Inc.’s Portfolio

The mall retailer saw sales rise after swapping generic office clothes for a stronger point-of-view inspired by its safari-themed origins. The new look wasn’t for everyone — and that was the point.
Woman in a zebra suit sitting on a yellow couch in yellow tent.
Banana Republic sales were up 9 percent in its most recent quarter compared to last year, the biggest growth posted by any of Gap Inc.'s four portfolio brands. (Richard Phibbs)

Key insights

  • Banana Republic sales were up 9 percent in the quarter ending July 30 — helping to send Gap Inc. shares 6 percent higher despite the company's overall dip in revenue.
  • The long-struggling mall brand's turnaround is rooted in its transformation of product assortment, as well as greater attention to the customer experience in stores and online.
  • CEO Sandra Stangl envisions Banana Republic to one day become a full lifestyle brand.

It’s been a tough year for Gap Inc.

A collaboration between its namesake brand and Ye has had an anticlimactic retail rollout, while Old Navy sales are retreating. Even Athleta, the once fast-growing activewear label, is seeing sales level off.

Hope has come in the form of two unexpected quarters for the American’s retailer’s fourth brand: Banana Republic, a mall chain known for generic wear-to-work button-up blouses and floral dresses — the same ones that could be found in an Ann Taylor or Express — that became almost entirely obsolete during the pandemic.

But the tides are turning. Banana Republic sales were up 9 percent in the quarter ending July 30 — helping to send Gap Inc. shares 6 percent higher following the otherwise bleak earnings report. In the quarter ending April 30, sales grew even more dramatically compared to last year, rising 24 percent while Gap and Old Navy were both down double digits.


Rebounding sales are the payoff to a grand reinvention of the Banana Republic look that began a year ago, under chief executive Sandra Stangl and then-chief brand officer Ana Andjelic. The idea was to eschew the brand’s inoffensive offering and replace it with an undeniable point-of-view. The result was “Imagined Worlds,” an adventure-themed campaign that re-introduced Banana Republic’s origins as a safari apparel maker with sharply styled and tailored products like utility jackets, cargo pants and wide-leg trousers.

The look — part-bohemian and vaguely imperial — wasn’t for everyone. But that was the point. Banana Republic had been so bland for so long that it became imperceptible to consumers. Now, its British Army-inspired trousers and suede fisherman vests stand out in a sea of boring chinos and tops.

“The rebranding has been very successful,” said retail consultant Robert Burke. “It’s become very focussed on silhouettes and some nostalgia, and it’s a look that hasn’t been addressed by any other brands in this price point.”

Maintaining that upward trajectory is going to get harder for Banana Republic as the novelty of its new look wears off. Andjelic left the brand last November, but her fingerprints are still on much of its new collections. Banana Republic has not hired a new chief brand officer. Instead, chief Stangl and her team of design creatives are paving the way for the next chapter of the brand’s turnaround.

In addition to the new look, Banana has cut back on promotions to just two sales per year and some seasonal promotions, like Black Friday. The average unit price has increased — a pair of pants cost around $100 and leather jackets upwards of $500 — and it has introduced new categories such as BR Baby and BR Athletics, a capsule collection of classic collegiate sports attire. The brand is relaunching its shoes and handbags offering this week and has increased its assortment of cashmere garments.

More than half of Banana Republic’s sales come from its lower-priced Banana Republic Factory segment, where prices are at least half off compared to retail.

The brand has benefited from the surge in demand for occasion wear, whether that’s dresses for parties or suiting for meetings that have returned to conference rooms over Zoom, according to Janet Kloppenburg, retail analyst at JJK Research Associates.

But that demand may not last as consumers finish restocking their closets.


“I think they’re doing a nice job but it’ll take another year for us to get into a normalised environment, where people aren’t rushing to refill their wardrobe for special occasions or work,” said Kloppenburg. “But they’re very much on the road to success.”

Lessons From a Lifestyle Veteran

Under CEO Stangl, the brand has also revamped its retail strategy. Dozens of unprofitable stores will be shuttered as part of Gap Inc.’s plan to close 350 Gap and Banana Republic stores between 2020 and the end of 2023.

Stangl recently unveiled a whole new website too, an image-oriented e-commerce experience similar to that of accessible luxury furniture brand Restoration Hardware, where she served as an executive before coming to Banana Republic in 2020.

Stangl, in fact, is taking several cues from Restoration Hardware to inform Banana Republic’s transformation. For instance, Restoration Hardware is known for its experiential retail, with striking store interiors and bars inside certain outposts. Some Banana Republic stores now offer beverage services, according to Stangl, with most now offering at least San Pellegrino to shoppers.

Stangl has expanded in-store styling services to every Banana Republic store and is exploring tailoring capabilities in five locations.

“We have the opportunity to help our customers with their personal style and putting the pieces together,” said Stangl. “That’s the experience we’re working on creating.”

Banana Republic could one-day be a full lifestyle brand, she added. Next month, the brand will launch an art vertical, where shoppers can buy photographs and prints from an assortment of artists, priced between $800 and $3,000.

“I remember the first time I walked into a Banana Republic store, I think it was 1996. It was during the holiday season, and they had gorgeous red trench coats, [but] at that time there were cashmere throws, bed linens and table tops, too,” Stangl said.


If it makes sense to one day offer these homeware categories again, then perhaps the brand will, she added.

What Lies Ahead

Some say Banana Republic has only accomplished the easy part of a turnaround. Maintaining its momentum now will be much more difficult than refreshing its assortment, said Andjelic, who left the company to pursue other opportunities after only nine months with the brand.

“A true brand refresh requires more than just changing the marketing [material] and that transformation, if it has indeed been made, takes longer to yield results,” between three to five years, Andjelic told BoF.

“Changing the brand creative without changing the underlying marketing, business, and operational approach is just putting lipstick on a pig,” she said.

More critically, Gap Inc. desperately needs a refresh for its namesake brand and Old Navy.

Banana Republic remains a fraction of Gap’s overall business. The company posted $16.7 billion in sales in the year ending on January 29, 2022, and Banana Republic accounted for about 12 percent of it, or $2 billion. Banana alone cannot mount a full turnaround for Gap Inc., but there are lessons that the executive team could learn from Banana Republic’s success so far.

“From a customer standpoint, Gap is complicated because it’s so much bigger,” said Burke. “But Banana shows you the importance of clear messaging, strong imagery and competitive price points … It’s not trying to be everything to everybody, and I think that’s very important.”

Further Reading

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With its new menswear collection under creative director Brendon Babenzien, the retailer has its best shot in years at returning to the fashion zeitgeist.

About the author
Cathaleen Chen
Cathaleen Chen

Cathaleen Chen is Retail Correspondent at The Business of Fashion. She is based in New York and drives BoF’s coverage of the retail and direct-to-consumer sectors.

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