Courtesy of Parachute Home
A luxury home goods brand has been quietly closing stores over the past year, marking a shift away from brick and mortar.
Parachute Home, a privately owned VC-backed company, had 26 stores in 2024. As of Wednesday, it slashed that number to seven operating locations, CEO Mehdi Oufkir confirmed to Business Insider.
“We opened stores that were too large or in regions where brand awareness wasn’t as high as it needed to be,” Oufkir said.
Before the closures, California-headquartered Parachute had locations in Minnesota, Washington, D.C., Chicago, and more, according to its website. It went from three stores in New York City in 2024 to one in Manhattan’s SoHo neighborhood today.
With this pivot, Parachute plans to focus on its e-commerce business and partnerships with large retailers such as Target, the company said.
Parachute, founded in 2013, is best known for its luxury bedding. It started selling its linens online as a direct-to-consumer brand and opened its first store in Los Angeles in 2016. As of January 2024, it had raised $47 million in funding, according to PitchBook.
The company was part of a wave of direct-to-consumer brands like Brooklinen sheets, Casper mattresses, Harry’s razors, and Allbirds sneakers that boomed in the e-commerce era and through the pandemic. Many attracted a large millennial following and venture capital funding. But some, such as Glossier and Peloton, have since struggled to scale or turn a profit.
Brick-and-mortar isn’t so simple
Parachute isn’t the only digital-native brand to struggle with transitioning to physical stores.
Allbirds, a sustainable shoe brand that was once part of the “tech bro” uniform, operated 58 stores in 2022. Since then, it has shrunk its retail footprint, closing 14 underperforming stores in 2023 and 2024.
“When you try to sell your brand direct to consumer, you have a finite audience,” Circana analyst Marshal Cohen told BI. He said success with brick-and-mortar requires a brand with a “strong reputation” and a big reach.
It can be tough for even an established brand, though. Nike doubled down in 2020 on opening new stores and shed some retail partnerships. After years of lackluster sales, its new CEO said in a December earnings call that the company was now working on repairing wholesale relationships with major retailers.
Wholesale deals with established retailers can give a brand exposure to new and diverse audiences.
Parachute’s course correction includes focusing on partnerships with retailers like Nordstrom or Target to help the company expand in more markets. For example, Parachute said its Target collection, which launched in April, has performed well in Florida, where Parachute has never opened a store.
Cohen said these partnerships can also be mutually beneficial. When successful, they allow brands to reach larger audiences, stay relevant, and have the backing of reputable retailers, while stores keep their portfolio fresh and pocket a portion of the profits.
Parachute has a new plan
Beyond the in-store strategy, Parachute said it’s made missteps with its product selection.
The home decor market boomed during the pandemic as people sought to beautify their homes that served as offices, gyms, and more during lockdown.
During that time, Parachute attempted to branch out beyond e-commerce and test new products such as furniture.
“We overreached,” Oufkir said.
Now, the company is going back to focus on “core essentials,” including bedding and bath, he said.
“We don’t need massive storefronts to convince people to try them,” Oufkir said. “When the product is right, the brand speaks for itself.”
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