Parachute bets on a scaled-down store fleet to drive growth
In a moment of widespread store closures, linens brand Parachute is making the most of a smaller footprint.
Back in June, Parachute announced it was shutting down 19 of its stores. Today, the brand’s six remaining stores include three Los Angeles locations – Venice, West Hollywood and Silver Lake – plus Seattle, Washington, D.C. and SoHo in New York City.
But beyond selling products, the stores are becoming an extension of the company’s out-of-home marketing campaign, hosting private events and launch parties. So far, all stores are running profitably, said svp of marketing Katie Sheeran, and sales are up year-over-year.
“It really is like having six permanent, beautiful billboards out there,” Sheeran said. “And it has this concentrating effect where we can focus our marketing on those areas and make them really vibrant experiences, rather than yet another storefront.”
The closures were part of a larger strategy at Parachute to focus on its core product offerings. Some of Parachute’s newer stores were larger footprints meant to accommodate its now-discontinued furniture line — meaning bigger leases that may no longer be justified.
Launched as a direct-to-consumer company in 2014, Parachute started growing its brick and mortar footprint in 2016. In 2018, it closed a Series C for $30 million meant to drive omnichannel growth and product innovation. The home goods boom of the Covid-19 era helped spur the company’s growth — it doubled its store count in 2022 — and its newest location was a flagship in New York City’s Flatiron neighborhood.
But last year, the company began to return to its core focuses. It discontinued its furniture line that it started in 2022. Then this April, it launched a more affordable line of its linens exclusively for Target.
While it may be exciting for brands to show up with a store in many markets, Sheeran said a smaller footprint means Parachute stores can be “a bigger fish in the pond” in its remaining markets. Having too many stores means fewer resources to spread around, and it can make it more challenging to offer a unified experience. “You can’t spread the peanut butter too thin, and we did a big swing by expanding so far,” she said. “That wasn’t the right decision. We were pushing against the current on that front.”
Though it doesn’t share its revenue, Parachute turned profitable last year. “Ultimately, we’re building a more hero-driven business and a more core-driven business,” Sheeran said.
This year, there have been a number of retail closures from brands like Joanne, Rite Aid and Party City that filed for bankruptcy. But even companies that aren’t filing for bankruptcy are shrinking their physical footprint to save money. Just this week, outdoor retailer Orvis said it’s closing 31 stores plus five outlet locations. Fossil is in the process of closing up to 50 stores this year. Last year, Allbirds shut down about 10-15 underperforming stores, while Outdoor Voices got out of physical retail altogether.
Rebecca Fitts, a retail real estate consultant, said expanding too quickly is a common mistake DTC brands may make when going omnichannel. Armed with sales data from online customers, they scout out opportunities in areas ripe with customers. But selling in person is different than selling online, and not all brands adapt to the change or hire and train associates who can sell, Fitts said.
Furthermore, expensive leases can make it difficult to stay profitable, while the current costs of building and designing new stores is prohibitive for many brands.
“It’s about drilling down into every location,” she said. “You can’t just open five to seven stores a year unless you’ve really got it down pat.”
In selecting which stores to keep open, Parachute focused on brand strength and local demand. It kept the top performing stores by revenue, as well as its first location in Venice Beach that’s been open for nearly a decade. “Those stores are the really big winners growing revenue year-on-year,” she said.
By continuing to host events in the stores or roll out geo-targeted marketing, the brand sees a ripple effect online and in other markets, Sheeran said.
Looking forward, Sheeran said Parachute’s stores are not only a place to drive sales but also a place that the brand can experiment with pop-ups, products and events.
“There’s so much emotion and feeling — relaxation, rejuvenation, inspiration — that you can get from the home category,” she said. “And so because of that, it’s very important that we have physical touch points, which is why experiential marketing is an increasing bet for us.”
On a daily basis, the stores are designed to feel “homey,” with bedroom layouts and full-sized products available for people to touch. Sheeran said there has also been a bigger focus on team members connecting with customers about their needs. Rather than explaining the technical differences between linen and percale, they start by asking what kind of fabric or temperature the person prefers when they sleep.
“We need to make sure that it’s really easy to buy products, a really seamless experience, and that we’re connecting into that feeling of warmth and love and peace at home,” Sheeran said. “We don’t think of it as ‘just’ a store. It really should be a place that you can feel the brand.”