Ikea finally plans to open a store in Estonia

Irving Hamilton
October 11, 2018

"We're exploring new store formats in city centres - all with the aim to improve the meeting with our customers both physically and digitally", said Jesper Brodin, CEO of Ikea's Ingka Group, which operates Ikea stores in the US, Europe, China and other global markets. We will introduce smaller store formats and offer a wide range of flexible and affordable services.

A spokesperson for Ikea said it had no New Zealand news to reveal.

Ikea laid the foundation for its Bengaluru store on Thursday.

"Bengaluru is truly cosmopolitan with many people moving in to find new opportunities".

In 2008, the Environment Court ruled that the company could not be a tenant in the Auckland suburb of Mt Wellington's retail development, Redwoods, because of concerns its popularity would cause traffic chaos. IKEA aims to be present in 49 cities by 2030.

IKEA, which makes most of its sales in Europe, opened its first store in India this year and announced plans to enter Latin America, starting with Chile in 2020 followed by Colombia and Peru.

Bodo Lang, head of the University of Auckland Business School marketing department, said it was unlikely New Zealand would get Ikea soon. Its Mumbai store, the second one in India, is set to open later this year.

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"What is possible is that Ikea may modify its business model to serve untapped markets, such as New Zealand, in a different type of way".

Ikea's India chief executive Peter Betzel told Mint in June, about three months after he took over the reins from Juvencio Maeztu, that the country will be one of the top markets for the company.

Ingka Group said in a separate statement that its full-year sales rose to €34.8 billion from €34.1 billion a year earlier.

IKEA reported a 5 per cent rise in annual sales on Wednesday as strong online growth and new stores in countries such as India and Latvia helped the world's biggest furniture retailer to cope with mounting competition. The company's fiscal year runs from September to August. The store was expected to attract more than 7 million visitors per year, he said.

The company's results were also helped by rising online sales.

Ikea's Bengaluru store is expected to employ 800 to 1,000 directly and engage the services of another 1,500 indirectly. That means new Ikea franchisees should be able to "reach bigger volume faster with lower costs", Loof said.

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