x Abu Dhabi, UAESaturday 22 July 2017

Expansion for furniture retail giant

Ikea is on a €3 billion global expansion drive this year that is set to include new stores and investment in factories.

Ikea is on a €3 billion (Dh14.56bn) global expansion drive this year that includes new stores and factories.

The furniture giant opened seven stores last year versus 12 in 2010, but the company has not given guidance on the number of stores it will open this year. A proposed store at Ibn Battuta Mall in Dubai would not be finished until next year.

Ikea plans a major expansion of stores in China and Russia, and is planning new stores in South Korea, Croatia and Serbia as part of its international growth.

One major market Ikea is not looking to enter immediately is India, where the retailer says government rules on sourcing mean its mass-market business model is unworkable, the Financial Times reported.

India recently opened its market to single-brand retailers, but Ikea has said the requirement that companies source 30 per cent of their products from local small to medium enterprises makes setting up shop in the country impossible. The furniture retailer buys in bulk from global suppliers to keep its prices in the mass-market bracket.

Ikea, which is privately owned, released financial figures for the first time last year. Profit was up 6 per cent to €2.69bn in the year to August 31, as revenuerose 8 per cent to €23.5bn. Sales edged up 2.4 per cent. Ikea had 287 stores in 26 countries and 131,000 employees at the end of August.

rjones@thenational.ae