(Bloomberg Businessweek) -- Ariel Kaye got into home décor while attending New York University, where she liked to zhoosh up her apartment with items such as bookshelves made of reclaimed wood. When she studied abroad in Florence, she practiced her Italian in the textile markets, and while pursuing a master’s in media studies at Manhattan’s New School, she started a design blog. “I was the person at a bar who, when people asked me what I did, I would say I was an interior designer. Even though I wasn’t,” says Kaye, 33. In reality, she worked in public relations, then advertising, where she witnessed the rise of online direct-to-consumer companies such as Warby Parker.
Millennials might have had a go-to brand for eyewear, but Kaye realized they didn’t have one for sheets. She’d finally found her calling with home goods. “I had never had a brand ask me how I slept at night,” she says, noting that people can run hot or cold. “I felt like the bedroom was a place where I could drive loyalty.” After a European trip during which she visited 15 factories, Kaye introduced Parachute Home in January 2014. Within a week, sales went from three sets of sheets a day to 50, thanks to rapturous coverage on design blogs. Today, Parachute’s roster of products includes not only sheets (its signature Venice set starts at $219) but also linen napkins ($30 for two) and looped bath rugs ($49), and Kaye is chief executive officer of a company with 31 employees and $30 million in projected revenue for 2017. While homeware giants such as Bed Bath & Beyond Inc. are closing outlets, Kaye is starting to build an offline footprint for Parachute, putting branded hotel suites on top of its stores.
Joe Derochowski, who tracks the $13 billion bedding industry for market-research firm NPD Group, says Parachute and online mattress peddlers such as Casper Sleep Inc. and Tuft & Needle have done a “phenomenal job of decommoditizing the sleeping industry. They talk about [a product’s] benefits, why you should buy it, how you should buy it. They educate the consumer,” he says.
Parachute tries to take the marketing-speak out of buying sheets by articulating the feelings they evoke rather than using classic talking points about, say, thread count. Kaye says “organic” cotton is a meaningless label, for example, because “you can still use formaldehyde in the manufacturing process.” Parachute’s website stresses the company’s connection to textile artisans; it describes percale as “cool and crisp to the touch” and linen as “light and airy,” both good options for sleepers who run hot. None of these choices was made on a whim: Parachute has a team of in-house analysts who maintain dashboards of customers’ demographic data and gain additional insights from social media to figure out what buyers might want next. Kara Nortman, a partner at Upfront Ventures, which led Parachute’s last two funding rounds, says of Kaye: “Talking to her about fabrics is like talking to a Google engineer about AI or machine learning.”
Parachute’s hospitality arm is a response to the reality that customers aren’t likely to buy a set of sheets, let alone napkins, all that often. For a nightly rate starting at $650, anyone can stay in a 2,000-square-foot suite above the company’s Venice, Calif., headquarters, furnished with Parachute products. “Relax, sleep in, take a bubble bath, do whatever you want to do,” Kaye says. (If, once you leave, what you want to do is apply the company’s beachy-casual aesthetic to your own home, Parachute’s blog offers advice on styling sheets and throwing a dinner party using its table linens.)
Parachute’s second store-hotel will open in Portland, Ore., this summer. Like the Venice location, it will be next to an artisanal ice cream shop. “I joke that, in the future, we’re only opening stores next to ice cream places,” Kaye says. “I sort of love that as a strategy.”
To contact the author of this story: Sheila Marikar in New York at sheila.marilar@gmail.com.
To contact the editor responsible for this story: Jillian Goodman at jgoodman74@bloomberg.net.
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