"The models in Banana Republic ads are the people you hate, but always want to be like," Snyder of Morgan Keegan said. "They're very confident, cool and hip."
The commercials have aired during such shows as "Ally McBeal," "ER" and "Friends," whose audiences include Banana Republic's prime customer.
Banana Republic's foray into television advertising has been a pricey investment. Last year, the company spent $4.7 million on advertising, almost exclusively in magazines, according to Competitive Media Reporting. This year, it more than tripled its budget to an estimated $16.5 million.
But after this past fall's stellar performance, analysts and Banana Republic executives believe the high-profile campaigns paid off.
"We've had a better reaction from the television campaign than we expected," Schoening said. "One of the reasons we wanted to go on television is because it allowed us to use sound and movements. Customers say we have a sensual brand, and the commercials affirmed our brand."
Mail-Order Catalog Makes a Comeback
In fall this year, Banana Republic also brought back its catalog. The company would not comment about the cost of its mail-order business, but analysts said big bucks were spent.
Banana Republic opened a 90,000-square-foot distribution center in Ohio and hired 200 people to restart its mail-order business.
And instead of the typical glossy finish of most catalogs, the new Banana Republic catalog has a matte finish and is printed on high-quality paper. It also is bound like a book, instead of stapled in the center like most catalogs.
"We wanted to replicate the experience of shopping at our stores in our catalog," Schoening said. "That's why we used great paper and photography."
The company inserted its catalog in major newspapers and in such magazines as GQ, Vanity Fair, Vogue and the New Yorker. Catalogs also are being distributed at prominent hotels and airports in New York, San Francisco and Chicago.
In addition, Banana Republic has been aggressively growing its chain. This year, it opened 40 new stores. Next year, 48 store openings are planned, said spokeswoman Cindy Capobianco.
Although some retailing experts caution that a too-rapid expansion could be harmful, Schoening isn't worried.
"We still have a significant way to go to try to increase awareness of our brand," she said. "Our strategy is to do it carefully, with the first push in major U.S. markets.
"The main thing we have to do is listen to our customer base and figure out what people are responding to. That's how we're going to successfully evolve."
