Swedish fashion giant H&M has announced the closure of its digital outlet Afound, citing weak demand and changing market dynamics.

The decision, revealed on Wednesday, marks the end of a five-year experiment in the off-price retail sector for the global clothing retailer.

Launched in 2018, Afound initially operated as a physical outlet business, offering discounted clothes from various external brands. The concept later pivoted towards a predominantly online model, expanding its reach to seven European countries including Sweden, Germany, and the Netherlands.

In a statement, H&M explained the rationale behind the closure: "When evaluating Afound's current position, we don't see enough demand, partly because brands increasingly choose to use their own channels for sales, to further strengthen their customer relationships."

The shifting landscape of retail, with brands increasingly opting for direct-to-consumer models, has posed challenges for third-party outlets like Afound. This trend has accelerated in recent years, with many fashion companies prioritising their own ecommerce platforms and customer loyalty programmes.

H&M Group, known for its constant review of initiatives and brand strategies, framed the decision as "difficult but necessary" to ensure long-term economic viability. The company emphasised that valuable insights gained from the Afound experiment would be leveraged in future endeavours.

The closure is scheduled for later this autumn, with operations to be phased out over the coming months. H&M has pledged support for affected employees, stating that "the team will be supported in continuing their career within or outside the group."

Despite the setback, H&M remains optimistic about the lessons learned from Afound's journey. The company noted that the venture had "broken new ground for H&M Group, renewing off-price in a way that has served both customers and brands since the start in 2018."

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