PARIS — Hennes & Mauritz is entering the acquisition game.
The Swedish fast-fashion behemoth said Thursday it purchased a 60 percent stake of privately owned Fabric Scandinavien AB, makers of the ubertrendy Cheap Monday fashion label, among others.
The deal cost H&M 564 million kronor, or $91.7 million at current exchange, and includes an option to acquire the remaining 40 percent within three to five years. Fabric Scandinavien will operate as a stand-alone subsidiary within the H&M Group, the company said.
The acquisition is a good fit for H&M. Denim brand Cheap Monday is sold in more than 1,000 stores globally and experienced a 300 percent increase in turnover last year, as demand for its affordably priced rock 'n' roll looks stole share from more premium-positioned players.
Fabric Scandinavien's portfolio also includes contemporary fashion chains Weekday and Monki. Weekday, which offers a selection of edgy fashion labels, counts six stores in Sweden with a Copenhagen-based store slated to open this month, while Monki's 12 stores, scattered around Sweden, target young women.
"We have been impressed by Fabric Scandinavien's development for a long time and we see a potential to develop stores and concept stores in other markets," H&M's chief executive officer Rolf Eriksen said.
"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," he added.
H&M has grown organically at breakneck speed following a boom of global flagship openings; collaborations with famous designers, including Karl Lagerfeld, Stella McCartney, Viktor & Rolf and Roberto Cavalli, and the launch of its upscale subsidiary, COS.
In a conference call, H&M chief financial officer Leif Persson said the Fabric Scandinavien purchase represented a significant move for the Swedish retailer, marking the first time the group has dipped its toes into the multibrand retailing arena. H&M has ambitious plans to roll out Monki stores globally and would not rule out further acquisitions, he added.
The deal also nets the company the forward-thinking leadership of Fabric Scandinavien, according to Persson, as well as its 300-strong employee roster."We are very sure we will have a lot of inspiration from the people working in Fabric Scandinavien who are very creative, very cost-conscious and have a lot of ideas," said Persson, adding the company had "very big expansion potential."
However, Persson said Fabric Scandinavien would be kept as a separate entity.
"There will be no collaboration in design or buying," said Persson, noting that Cheap Monday will not be sold in H&M stores.
For the fiscal year ending April 30, Fabric Scandinavien reported sales of 250 million kronor, or $40.7 million, and an operating profit of 67 million kronor, or $10.9 million. H&M said it expects Cheap Monday's sales for 2008 to reach about 400 million kronor, or $65.1 million.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty