Parachute expands into the living room
Parachute, the venture-funded Los Angeles-based home furnishings brand, is launching its line of living room furniture Wednesday, CEO Ariel Kaye tells Axios.
Why it matters: It's the next significant growth phase for a company that aims to increase sales by a double-digit percentage this year after generating some $150 million in revenue in 2021, Kaye says.
Flashback: Parachute has raised $47 million since it launched in 2014.
- Its last round of funding was a $30 million Series C raised in 2018 led by H.I.G. Growth Partners.
Details: After first launching furniture about a year ago, starting with bed frames, Parachute is adding sofas, chairs, lamps, coffee and side tables and rugs to the mix.
- It's a bid to capture part of the $70 billion market for living room furniture, with furniture overall a major growth driver for the business going forward, Kaye says.
- It's also a move to increase its relationship with interior designers, one of Parachute's fastest-growing channels and which accounts for 25% of its furniture sales.
- Interior designers, who shell out $45 billion on behalf of their clients, also spend more than four times that of its non-trade customers, Kaye says.
- One of Parachute's products is a pillow couch, an attempt to "create a pillow in the shape of a couch," which retails for $3,600 to $4,200.
Yes, and: The living room line aligns with the company's plan to have 25 physical stores by the end of 2022. It began the year with 12.
Of note: Since the 2018 financing, Kaye emphasizes that in recent years the company has scaled by reinvesting its profits.
- However, Parachute has been on the conference circuit, talking with family offices, growth equity investors and cross-over funds in case it wants to raise further capital, Kaye says.
- "There are many growth initiatives that could benefit from capital," Kaye says.
What's next: The company is in the midst of lease negotiations and early construction for the stores it plans to open next year, with the idea of adding 10 to 20 locations yearly.
- Kaye says she aims to open a total of 150 stores in the U.S.
- Parachute also plans to launch products tied to gifting, decor, bedding and collaborations for the upcoming holiday season.
The big picture: "It would be crazy not to be concerned" about the macro economic environment, Kaye says.
- "We see what’s happening with home purchases and trends," she adds.
- Because 72% of its customers are millennials, who are moving into their prime productivity and household formation years, Parachute expects continued growth, Kaye says.