Cheap Monday: an end foretold?
After only 10 years, it is game over. Ten years after buying the thriving Fabric Scandinavien AB company (owner of Cheap Monday, Monki and Weekday), the H&M group has decided to throw in the towel, marking the end of the road for Cheap Monday. An end that was announced on Tuesday in a press release by fast-fashion giant Hennes & Mauritz, pointing the finger at the changed nature of the industry, and the jeans label’s reliance on a wholesale distribution model which has taken a beating in the last few years. Cheap Monday’s London store and the label’s e-shop will close down on December 31, while the rest of the business will do so by next June.
For some, the news was a bombshell, so high had Cheap Monday risen in 2008. At the time, H&M bought a 60% stake in Fabric Scandinavien AB from the Swedish company's founders, Adam Friberg, Lars Karlsson, Örjan Andersson and Linda Friberg. H&M shelled out €60.4 million for the 60% stake, and in 2010 it completed the acquisition of Fabric Scandinavien AB by buying the remaining 40%.
By then, Cheap Monday jeans were virtually ubiquitous, in the world’s leading stores and the international media. The label’s founders had a good nose for business. They started out in 2000 with Weekend, a successful vintage fashion store in Stockholm. Two years later, they opened Weekday, a multibrand store distributing directional, emerging designer labels. This venture too was a hit, its popularity constantly growing. But Örjan Andersson, the designer of the bunch, was frustrated. He wanted to reach out to a wider audience with an affordable product, and in 2004 he turned his back on the premium denim trend, creating Cheap Monday with his associates. The label’s slim, skinny jeans selling for €50 a pair quickly won over a huge number of customers of either sex, in several countries.
According to many industry professionals, in the history of jeans there is a pre and a post-Cheap Monday era. Slim cuts made their break-through with the success and media boom of Dior Homme as reinterpreted by Hedi Slimane, but Cheap Monday democratised the skinny look, forcing other labels to follow. In France, Nordine Yousfi and Stéphane Juge of the Linksury showroom were the agents for Cheap Monday at its inception, before taking on its distribution. “A Swedish friend showed off his pair of jeans to us, telling us they sold for €50 and were a blockbuster success in Stockholm. €50? We didn’t quite believe it, but we bought 500 pairs for Royal Cheese [their Parisian store] and made sure that the brand was available at a few well-known stores like Colette, Noir Kennedy and Shine. Everyone sold the whole stock in a flash,” said Yousfi, adding: “We tested the water by meeting the label's founders in Stockholm, and soon realised that [Cheap Monday] had a huge potential.”
At the height of its success, Cheap Monday was distributed by over 1,000 stores worldwide. In France, one of its main markets, it was available at 450 stores, and in France alone the wholesale revenue reached €8 million. Yousfi said: “We were selling 70% jeans and 30% of the other items. You have to sell a lot of jeans at €20 per pair, and t-shirts at €7-€8 each, wholesale prices, to add up to €8 million. At Royal Cheese, which is a small shop, we sold up to 1,200 pairs of jeans per month for about two years. Other retailers were buying up to 800 pairs per colour, 50 pairs per size. Quite simply, we were selling cartons of jeans by the shovelful. It was pretty crazy, like something out of a comedy show!”
Now, Cheap Monday is distributed by no more than 30 stores in France. In February 2017, H&M closed down the Cheap Monday store in the Marais district in Paris, and replaced it with a Weekday store, which still sells Cheap Monday jeans. Yet, despite the fact that H&M featured the label in later initiatives, especially in the sustainable fashion field, it seems it couldn’t or wouldn’t let Cheap Monday evolve over time, and extend its range beyond stretch denim.
Linksury’s founders Yousfi and Juge said they were not surprised by the discontinuation of Cheap Monday. “From Weekend to Cheap Monday, the designers at Fabric Scandinavien AB were successful by always being very creative, by regularly surprising their customers and distributors. And the basics of their business were solid. We think the buzz that their stores and their brands, especially Cheap Monday, caused in Stockholm and in Nordic countries gave H&M a scare, throwing a spanner in the group’s works, and H&M decided to buy them out. But fast fashion has nothing in common with the running of a fashion label. Pity it's ending this way.”
Last January, the Swedish giant revealed that its profits for the 2017 fiscal year were down 13%, with sales growing by only 4%. Diversification was the way to get back on the growth track. In 2018, H&M launched the Web Afound site, an e-shop for cut-price products featuring several labels not belonging to the group, as well as H&M’s own brands. For the time being, Web Afound is only active in Sweden, backed by a few physical stores opened in Stockholm. It wasn’t the only new concept spawned by H&M in 2018. After launching Arket in 2017, H&M introduced Nyden, a new label with a strong online and social media presence. H&M’s eighth label targets primarily millennials, and looks to foster an online community, winning over influencers with a rather upmarket product range. Yet, the future for Nyden too seems uncertain. Nyden’s founder left last July, three months after the label’s launch. In October, it was announced that Nyden would be featured on the main H&M website.
After several years of fast growth and success, the H&M group is currently under pressure for having “fallen behind” in its digital transformation. With these first reversals, it seems to be time to make some adjustments. It remains to be seen whether the discontinuation of Cheap Monday is just a small tweak, or the first step in a far-reaching reorganisation.
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