Everyone knows H&M as the go-to for affordable, fashion-forward finds.
The brand is popular amongst people of all ages, and there are barely any corners in the world where people don’t know know the retailer. But it looks like that popularity can’t help back all of the brands under the H&M umbrella.
Earlier this year, the Swedish clothing conglomerate made headlines for having incredibly bloated inventories, with an excess of $4 billion worth of product. A snag in supply and demand created inventory interruptions, and it’s something that H&M has been battling for the better part of 2018.
In an effort to tackle the issue, H&M is shuttering Cheap Monday.
H&M acquired Cheap Monday 10 years ago when the brand was in its prime. And earlier this week, the company announced that they would be shutting the brand down completely by June 30, 2019. According to a press release, the Cheap Monday e-commerce site and London flagship will both be closing at the end of the year.
Kate Ormrod, lead retail analyst at GlobalData, told Retail Dive that the closure was a long time coming. In fact, Ormrod said that this probably should have happened way sooner than it did. She noted, “there’s been a negative trend in Cheap Monday’s sales and profits for a long time.” Part of why Ormrod thinks that Cheap Monday is struggling is due to its competition with other denim brands. Its appeal just isn’t strong enough for the majority of shoppers.
With H&M ridding itself of the weak brand, it now gives the company more time, money, and energy to focus on growing the rest of its portfolio.
However, some analysts are worried about H&M’s new initiatives.
Primarily, analysts are worried about H&M’s new banners, Afound, Arket, and Nyden, all of which are only sold in Europe and are “too small to have much impact on sales.”
However, H&M Group’s Head Of New Business, Anna Attemark, thinks otherwise. She said, “We need to constantly develop our business and what we choose to invest in. We see very good opportunities and great potential for all of the other brands within New Business, which all are developing positively both digitally as well as through physical stores.”
Featured Image: Instagram/@gabcolthorpe