UPDATE: October 30, 2018: Banana Republic confirmed to Retail Dive that Cos Bar will be opening a pop-up shop at Banana Republic's San Francisco flagship, which kicks off Nov. 8. Guests to the store will "enjoy a VIP shopping experience," according to the spokesperson, including opportunities to visit a new personalization shop, receive custom alterations and sit at a lounge bar in the store.

Dive Brief:

• Banana Republic has teamed up with Cos Bar to open a shop-in-shop inside the apparel retailer's San Francisco flagship, according to a Women's Wear Daily report. The location is currently listed on Cos Bar's website.

• The Cos Bar is about one-third its usual size and staffed by Cos Bar employees. It will feature luxury products as well as a cheaper line, and it will also bring in new brands that could be expanded to other Cos Bars, according to Women's Wear Daily.

• Cos Bar CEO David Olsen told Women's Wear Daily that the shop-in-shop was just a test at this stage but that the company had always wanted to open its doors in San Francisco. Banana Republic did not immediately respond to Retail Dive's request for comment.

Dive Insight:

In recent years, Banana Republic has become more defined by its trajectory relative to that of Old Navy than by its own achievements as part of the Gap Inc. portfolio. While the cheaper brand continues to grow, Banana Republic and Gap have struggled, with a report in December showing severe customer retention problems at both branches of the business.

Getting into beauty might not seem like the answer to Banana Republic's struggles in apparel, but the popular (and competitive) category could help the retailer drive traffic and, maybe while customers are visiting the Cos Bar portion of the store, they'll pick up something from Banana Republic as well. The strategy is not unheard of — J.C. Penney, which has troubles of its own, relies heavily on Sephora shops, and Bloomingdale's announced just last month that it would be opening a clean beauty concept at ten locations.

Department stores in particular have tied their future to beauty, with many upgrading their beauty sections with new tech, brands and more brand-agnostic staff — an attempt to replicate the success of retailers like Sephora and Ulta, both of which command loyal followings. But specialty apparel retailers have also gotten into the space in the past. Fast-fashion retailer Forever 21, for example, announced its own beauty stores about a year ago.

A test partnership for Banana Republic makes sense as the retailer tries to assess how much beauty can help its stores, as beauty partnerships have become popular across sectors. Drugstore retailers CVS and Walgreens are good examples of that: the former has piloted a store concept with Glamsquad, and Birchbox announced earlier this month it would be launching sales at 11 Walgreens stores.

As it stands, the beauty category is a strong segment that could help Banana Republic's traffic, but it will likely take more work than Cos Bar shop-in-shops to turnaround the brand.