H&M’s Cheap Monday falls victim to changing retail landscape
Fast fashion giant H&M on Tuesday announced plans to shut its struggling independent brand Cheap Monday, which is known for selling low-priced skinny jeans.
The world’s second biggest fashion retailer said there has been a negative trend in Cheap Monday’s sales and profit for some time, which prompted its decision to close down the brand.
In particular, H&M blamed the changing retail landscape, which has made it harder for wholesale brands to compete against the rise of direct-to-consumer businesses.
“Cheap Monday has a traditional wholesale business model, which is a model that has faced major challenges due to the shift in the industry,” the company said in a statement.
H&M said that at the moment it is “prioritising and focusing on its core business”. The retailer is starting the closure process immediately and wants to complete it by June 30, 2019.
Cheap Monday has partnerships with around 3000 global resellers, as well as online marketplaces like The Iconic, which will be impacted by the closure.
The brand also has a flagship store in London and an e-commerce site, which are set to close on December 31. Besides store staff, the brand employed around 80 people in the Swedish cities of Tranås and Stockholm, who will be affected by the closure.
H&M said dialogue with union representatives has started and the company plans for all employment contracts to be terminated by 2019. All employees will be provided external career support and will be given guidance on how to apply for other positions within the group.
“We need to constantly develop our business and what we choose to invest in,” said Anna Attemark, head of new business at H&M.
“We see very good opportunities and great potential for all of the other brands within the new business, which all are developing positively both digitally as well as through physical stores.”
H&M acquired Cheap Monday, its first ever acquisition, 10 years ago from Swedish apparel company Fabric Scandinavien AB.
The company has since launched several independent chains such as Cos, Monki, Weekday and & Other Stories to broaden its customer base.