While Los Angeles-based retailer Fred Segal is known as a curator of fashion trends, the latest addition to its catalog isn’t apparel. It’s home goods.
Opened in late February, Fred Segal Home is the brainchild of Keith Granet and Blair Carlton, both veterans of the interior design industry. For Granet, the establishment of Fred Segal Home was the natural progression of a brand known for its curatorial prowess, picking the right brands and the right product at the right time to influence what constitutes good West Coast style.
“I had the idea to do Fred Segal Home 15 years ago,” Granet said. But at the time, the Segal family which still owned the company, rejected his pitch. In 2018, Fred Segal was purchased by Granet’s friend, Jeff Lotman. Granet pitched Fred Segal Home to him last year and was granted permission to start developing Fred Segal Home under a licensing deal.
“Now felt like the right time to do it,” he said. “We loved the idea of curating designers and launching new names. We’re going after new designers who are doing small capsule collections or maybe larger designers who don’t yet have a presence in Los Angeles and want some exposure here.”
In some ways, it’s a natural progression for a fashion brand or retailer to move into the home goods space, as has been shown by the success of home categories by companies like Ralph Lauren and Kate Spade. But there are considerations that brands should take into account, like the different margin structures of home goods and the possibility of licensing out a home goods line rather than making it in-house.
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For example, the margins on home goods tend to be much tighter. The costs of both making the goods and the handling expenses are higher.
“The margins are definitely stronger in fashion,” Granet said. “That’s unless you get into really high volumes. The challenge with home is that the best product is handmade by artisans, so it’s more expensive and the lead time is longer. And people tend to buy a lot less of it. Hopefully, when you buy a sofa, you have it for years to come.”
Fred Segal Home has tried to solve that problem by buying small capsule collections of products from local designers, limiting the initial costs and the excess inventory to sell through. This has the added benefit of keeping the brand’s new 4,000-square-foot showroom constantly stocked with fresh products since the limited quantities can sell through quickly.
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Blair Carlton said that larger home goods brands like Crate & Barrel often have a sameness to their product offerings because the high volumes they sell mean they’re going to the same few suppliers.
“We wanted to be a store where you go in and see something unique, and it won’t look like the same pieces that everyone else has,” Carlton said.
“Home is not meant to be trendy,” Granet said.
But the margin structure is something that other fashion companies haven’t been able to negotiate well. The RealReal announced last year that it would be halting its home goods business since the product was too unprofitable. The high costs of storing and shipping large pieces of furniture meant that The RealReal was sometimes selling home goods at a loss, spending more to acquire and ship to customers than the company made in revenue.
A popular solution to the expenses of operating a home goods business is licensing the line out to a third party, as Calvin Klein did when it signed a deal with home goods company Revman in September 2023 to produce and manage its home line. Fred Segal has taken a similar approach, licensing the name Fred Segal Home to Granet and Carlton, who pay Fred Segal for the right to use the brand name while they do the actual running of the business.
Fred Segal declined to share company revenues, but under new owner Jeff Lotman, it has been investing heavily in new stores — with openings planned in Europe and Asia this year — and in building its in-house fashion collection, Neighborhood. The goal is to have in-house collection sales make up 20% of revenue by the end of this year.
Granet and Carlton plan to market Fred Segal Home in much the same way that the company’s fashion is marketed: through paid social ads on popular platforms like Instagram.
Both fashion and home decor are avenues of personal expression. That’s why, even if it’s only based on a licensed model, home can be a way for a brand to flex its curatorial muscles. Tanya Taylor, another brand that has experimented with home goods, currently sells goods from artisan brands like Espelma and Helle Mardahl. All are hand-picked by Taylor herself, and they even inspired the design of Taylor’s new flagship store in Manhattan.
“[Espelma’s] packaging inspired our store design,” Taylor said. “We designed our bags and color palette around their use of neutrals with sophisticated pops of color.”
