SWEDEN: Hennes & Mauritz Acquires Cheap Monday brand

H&M has signed an agreement to acquire the privately owned Swedish fashion company Fabric Scandinavien AB that is running the store chains Weekday and Monki. The Group also designs and sells fashion through a number of own brands, such as Cheap Monday. The turnover for the financial year 2007/08 is expected to reach approximately SEK 400 million. The company will be run as a stand alone subsidiary within the H&M Group.

– 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, says H&M’s CEO Rolf Eriksen.

– H&M is a fantastic company and we have found that we share the same values. Together with H&M we will have better opportunities to truly develop our ideas within fashion and design. H&M’s knowledge of for instance production and international expansion will be extremely valuable to us, says Fabric Scandinavien’s CEO Lars Karlsson.

The subsidiary Weekday Brands designs, produces and runs wholesale selling of young fashion. Its largest own brand is Cheap Monday, primarily a denim line. The idea behind Cheap Monday is fashion at good prices, something that goes well with H&M’s business idea; fashion and quality at the best price. Cheap Monday is sold in more than 1,000 stores globally. Among the brands are also MTWTFSS Weekday and Sunday Sun.

The store chain Weekday is an urban unisex concept with a total of six stores in Stockholm, Uppsala, Gothenburg and Malmö. In March the first store will open outside Sweden in Copenhagen, Denmark.

Monki is a store concept and an own brand for young females. Since the start in Gothenburg in 2006 Monki has expanded to Stockholm, Uppsala, Malmö, Karlstad, Sundsvall and Norrköping, amounting to a total of twelve stores.

H&M acquires 60 percent of the shares in Fabric Scandinavien for SEK 564 million in cash. Sellers are the founders Adam Friberg, Lars Karlsson, Örjan Andersson and Linda Friberg. They will all continue to work within the company. In connection with the transaction the parties entered into agreement according to which H&M has the possibility/obligation to acquire the remaining shares in the company within three to five years. The total turnover of the Group’s business was approximately SEK 250 million during the financial year 2006/07, with an operating result of SEK 67 million. The expected turnover for the financial year 2007/08 is approximately SEK 400 million with continued good profitability. The employment conditions for the 300 employees will not change as a result of the transaction.

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Added: March 6, 2008 Source: Agencies
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