H&M (hm.com) has signed an agreement to acquire the privately owned Swedish fashion company Fabric Scandinavian AB. Fabric Scandinavian runs store chains Weekday (weekday.se) and Monki (monkigirl.com) , and also designs and sells fashion through its own brand-names, including the exceptionally successful – and nemeses of premium denim brands - Cheap Monday (cheapmonday.com).

H&M will acquire 60 percent of Fabric Scandinavien for SEK 564 million in cash with the understanding that H&M will have the opportunity to acquire the remaining shares in three to five years. FS, which will be ran as a stand alone subsidiary within the H&M Group, has an expected turnover of approximately SEK 400 million (ca. 66 Mil US Dollar) for the financial year 2007/08.

Fabric Scandinavien’s founders Adam Friberg, Lars Karlsson, Örjan Andersson and Linda Friberg will all continue to work within the company, and employment conditions for the other 300 employees will not change as a result of the transaction.

"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", said H&M's CEO Rolf Eriksen in a statement. "H&M is a fantastic company and we have found that we share the same values,” says Fabric Scandinavien's CEO Lars Karlsson. “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."

Pictured above, Cheap Monday F/W 08/09