Fashion retailer Hennes & Mauritz AB said Thursday it has signed a deal to buy privately owned Swedish fashion company Fabric Scandinavien AB, maker of Cheap Monday jeans.
H&M said it has bought a 60 percent stake in Fabric Scandinavien for 564 million kronor ($92 million) from the founders of the company, Adam Friberg, Lars Karlsson, Orjan Andersson and Linda Friberg. It also has the possibility to acquire the remaining stake within three to five years.
Apart from designing Cheap Monday jeans, Fabric Scandinavien also runs the store chains Weekday and Monki in Sweden.
Weekday is an urban unisex concept with a total of six stores, while Monki’s 12 stores are aimed at young women.
With their punk-rock style, trendy tight fit and affordable price, Cheap Monday jeans have become a hot commodity in recent years and are now sold in more than 1,000 stores globally.
H&M said the company will be run as a stand alone subsidiary within the H&M Group.
In the financial year ended 2007, Fabric Scandinavien had revenue of 250 million kronor ($41 million) and an operating profit of 67 million kronor ($11 million).
H&M said it expects revenue for 2008 to reach about 400 million kronor ($65 million).
“We have been impressed by Fabric Scandinavien’s development for a long time and we see a potential to develop stores and concepts in other markets. By working together we can accelerate the growth further. We can also do it in a more efficient manner by drawing on H&M’s experience and knowledge of, for example, production, logistics and establishment,” H&M Chief Executive Rolf Eriksen said.