By Kate Bonamici

(FORTUNE Magazine) – IN THE REALITY-TV-SPEAK of supermodel Heidi Klum, "You're either in, or you're out." When Jay McCarroll was dubbed "In" on the finale of Bravo's sleeper hit Project Runway, he walked away with a manager, 100 grand to start his own fashion line, and--puzzlingly--a "mentorship" at Banana Republic. So what's a nice store like BR to do with a wild child like McCarroll, who made a splash with his over-the-top persona, catty commentary, and street-smart designs?

It turns out neither party is quite sure yet. "We need to work with Jay to say, 'How can we help you?'" says Jack Calhoun, executive VP for marketing at BR. "Is he more interested in production? What he might really be looking for is some technical expertise." McCarroll, who appeared dazed from nonstop meetings since the finale, says he had initial reservations about the BR association. But he's come to realize, he says, that "an internship would mean I'm their bitch; mentorship means they're my bitch. Whatever I can learn from them on whatever level will have some benefit, I'm sure." (Yes, we can see the PR folks blanching from here.)

Jay aside, this is all part of BR's recent drive to raise its image from basic and work-friendly to runway-worthy. (In the past, says Calhoun, "we might have been a bit afraid of the F word--fashion.") On the show there was a Banana Republic Accessories Wall for the designers to use each week, and one challenge involved designing a dress for the store's holiday line. The winning design, a $188 silk number with a cape, sold out almost instantly in the 22 stores where it was available. And the New York flagship store displayed actual dresses from the show, like the cornhusk creation from the premiere. In addition to sponsoring Project Runway (along with L'Oréal, the Cotton Board, and Elle magazine), Banana also started producing its own runway shows in 2003. As for sponsoring a sophomore season of Project Runway? That's not In or Out for now--Calhoun says Banana is open to the idea, but Bravo doesn't have anything pinned down yet. -- Kate Bonamici