H&M hopes ‘Afound’ will bring a rebound
H&M, once at the top of the fast fashion world, has fallen on hard times. In the face of big challenges, the chain is launching a new store concept — one with even lower prices.
The new H&M concept, called Afound, will be a chain dedicated to clearing out the excess stock of H&M and other companies, according to Bloomberg. One problem H&M has experienced that may be contributing to its difficulties has been an inability to shake stock that is past its prime and didn’t sell in-season. H&M’s sales have dropped 40 percent in the last year.
Sources also cite an inability to thrive at e-commerce as being another reason for H&M’s fall from grace.
A press release from H&M describes the Afound concept as a “style- and deal-hunting paradise” and mentions that it will have an online marketplace component in addition to physical stores.
Despite the success of apparel retailers like Macy’s and Nordstrom with off-price concepts, Business Insider and others see the already low-priced H&M’s attempt to go even lower a sign of trouble.
Coming off a weak year, H&M plans to close 170 underperforming stores in 2018, according to Reuters. It will, however, open an additional 390 stores, fewer than it has opened in past years.
H&M is no stranger to rolling out new brands and store concepts. The chain owns seven brands besides the main one — H&M Home, COS, & Other Stories, Monki, Weekday, Cheap Monday and Arket. At least some of the brands have their own standalone brick-and-mortar presences. COS, for instance, has a limited number of U.S. locations (and many international locations) in addition to offering online sales. Some of the others have stores throughout Europe and abroad.
Even as it moves into off-price, the company recently announced the rollout of a brand called Nyden, Refinery 29 reported. The brand is an “affordable luxury” apparel brand targeted at Millennials and will be available, at least initially, through e-commerce and limited pop-up events.
And the company plans to roll out a “more enticing” version of the main H&M store concept in 2019, according to Reuters.
- Desperate H&M Hits the Bargain Bin to Solve its Problems – Bloomberg
- Afound – an innovative off-price marketplace – launches in 2018 – Cision
- H&M to close more stores in 2018 as online shift hurts – Reuters
- H&M Is Struggling to Figure Out E-Commerce – Fortune
- H&M GROUP AT A GLANCE – H&M
- H&M’s plan to open an even cheaper store is an ominous sign of trouble – Business Insider
- H&M Is Launching A New Affordable Luxury Brand, Nyden – Refinery 29
DISCUSSION QUESTIONS: What are the root causes of H&M’s recent difficulties? Will opening a concept with deep discounts on its own and other companies’ overstock help H&M get back on track?