Will a rental subscription program lift Banana Republic’s results?
Banana Republic, like sister divisions Gap and Old Navy, had a tough go of it in the first quarter with its same-store sales falling three percent, one year after posting a three percent gain. Now, days ahead of its second-quarter earnings announcement, the chain has gone public with its plans to launch a new clothing subscription rental service that management believes can help Banana Republic open a new revenue stream while generating incremental permanent sales as well.
Next month, Banana Republic will debut Style Passport, a monthly service the company is counting on to appeal to younger female customers who want to continually switch up their wardrobes and reduce the associated environmental impact at the same time.
“We’re constantly evolving with our customer, meeting her where she is shopping,” said Mark Breitbard, CEO and president of Banana Republic, in a statement.
The new service, he added, will enable the chain to “gather valuable insights from a highly interactive customer base that can be used to design future product and experiences.”
The monthly fee for Style Passport will be $85 to rent up to three pieces at a time. The program comes with free priority shipping, complimentary laundering services, unlimited exchanges and returns. Customers can choose to purchase any of the garments they rent. Banana Republic is planning to roll out a similar program for its male customers in the future.
The chain has partnered with CaaStle, a rental technology platform, to roll out Style Passport. It also plans to begin offering its own buy online, pick up in-store option in the fall.
- Banana Republic Introduces Style Passport, A New Rental Subscription Service For Women – Banana Republic
- Banana Republic joins the clothing rental craze – CNN
- Gap Inc. Reports First Quarter Results – Gap Inc.
DISCUSSION QUESTIONS: What do you see as the pros and/or cons of Banana Republic’s launch of Style Passport? Which retailers demonstrate best practices in how to run similar rental subscription programs?