“Company in Trouble Shutters Hundreds of Stores.”
This is a story you’ve likely read several (if not dozens of) times over the last two years. Brands are closing retail outposts left and right, and it’s not uncommon to stroll down streets in major cities across the US today and pass empty storefront after empty storefront.
But what happens to the brands that are doing well? Where do they turn when they don’t necessarily want to increase their physical footprint, but are still interested in building up brand equity and acquiring more customers — without buying more ads on social media alongside everyone else?
Marine Layer, a California-based fashion brand that’s been around since 2011 and is known for super-soft T-shirts and a chill West Coast sensibility, is dipping its toes into something Instagram-crazed millennials will appreciate: The brand is renting out apartments on Airbnb. And not just any apartments; apartments in touristy cities filled with interior design porn like mode vintage furniture, fiddle-leaf fig trees, and kitschy tchotchkes. Oh, and free snacks.
Next week, Marine Layer will open a two-bedroom apartment in a house on Magazine Street in New Orleans above its newest store location, complete with a sprawling backyard. The Airbnb will be Marine Layer’s third rental space. In 2014, it opened a loft above its store in Portland, Oregon, and in 2015 it began renting out an apartment above its store in Chicago’s Wicker Park. Later this summer, Airbnb will open a fourth location in Nashville, and the company is currently eyeing locations in DC, with New York and Austin on deck.
Marine Layer’s Airbnbs share the same retro aesthetic the brand maintains for its clothes and stores. There are old-school board games, walls filled with travel Polaroids, minibars, novelty wallpaper, vintage furniture, and plenty of color pop. (Reviewers have described the apartments as “hipster cool” and reminiscent of feeling “like you stepped into a time machine and went to Jim Morrison’s Hollywood bungalow back in ’68.”)
Company founder Michael Natenshon tells Racked that Marine Layer opened its first Airbnb, in Portland, out of sheer necessity; he and other team members kept traveling to the store from California, where his company is headquartered, and needed a place to crash. The store occupies the bottom floor of an old house in Portland, which had an upstairs loft available for rent too.
“I said, ‘Let’s have some fun with this place, and give it that real retro vibe that people love our stores for,’” he says now. “We had an inkling that we might do well in the hospitality space because people are always coming in asking if they can buy the furniture.”
Eventually Natenshon had the idea to list the Portland loft on Airbnb “as a funny extension of the brand.” Pretty soon the listing was booked 300 days a year, and Marine Layer set its eyes on replicating its success with a different location. The company settled on Chicago, where it gave a three-bedroom loft artful wallpaper, fun light fixtures, and rooms color-blocked in yellows, greens, and pinks.
Natenshon maintains that Marine Layer’s 34 stores across the country are profitable, and that the company’s sales grew 50 percent from 2016 to 2017. But the move into renting spaces is a response to the current state of retail, and one that signals thinking ahead. Shopping is changing, Natenshon says, and his company is thinking about thriving, not just surviving.
“We’re in an age where the traditional rules of retail and apparel don’t apply anymore, and so brands have to think about new and different ways to connect with their customer,” says Natenshon. “Ultimately, we want customers to come into stores to buy clothes, but this is also an opportunity for people to engage with Marine Layer beyond the stores. It’s a next-step evolution.”
A fun, retro-branded apartment is also a unique way to expose people to what he calls “the Marine Layer lifestyle.” Each Airbnb, for example, comes with city guides the team personally puts together to help tenants to explore the city. Tenants are encouraged to browse at the stores downstairs and get to know employees (there’s also 15 percent discount for those staying in the Airbnbs).
“We’re a company that makes clothes for people to enjoy the weekend, and we don’t take ourselves too seriously. These spaces breathe our DNA, and people really enjoy living it,” Natenshon says.
Marine Layer doesn’t have an official partnership with Airbnb (which declined to comment for this story), but Natenshon said his company is in talks with the hospitality giant to drum up something official as it looks to expand its rental program. Natenshon adds that the Airbnbs aren’t a huge money maker for the company, and that it is actually just breaking even with the project. But the Marine Layer team sees the step into hospitality as a better idea than “being a company that has ten stores in one city,” Natenshon says.
“There’s a lot of talk about store closures out there, but there’s also another story, and that’s about specialty brands providing something unique,” he says. “People are still going out, and vibrant, healthy, fun retail on cool streets are doing well, and that’s where we plan to always be. But we are also interested in investing in a brand experience.”
Experience has become the buzzy retail idea, and one that many brands believe will ultimately lead to customer loyalty. It’s why American Eagle is letting customers do laundry at its new Times Square location, why Frank + Oak has barbershops inside its men’s stores, and why Apple is betting its stores will turn into community centers.
Will it translate to cash? If Marine Layer’s hospitality play spins into 30 Airbnbs, and even a branded hotel, as Natenshon says his company might consider in the future, will it translate to the company becoming a retail unicorn? Maybe, or maybe not. Michael Brown, a partner in the retail practice at A.T. Kearney, believes it almost doesn’t matter. Plenty of companies talk about “branded experiences” that are fully immersive, but few offer the opportunity like Marine Layer.
“This is part of a trend we call ‘retail anywhere,’ where shoppers want to engage with a brand beyond a store and a purchase,” Brown says. “They want to build trust and an emotional connection.”
Even if renters don’t buy product from the store downstairs after swaddling themselves in the brand’s aesthetic over a long holiday weekend, they’ve at least established a unique emotional connection to the brand, notes Brown.
So far, it’s working. In several reviews on Airbnb, renters have referred to their hosts as their “Marine Layer family” — and kinship is the most a brand today can hope for.