Ikea is pivoting to physical stores to support the online business boom
The company that controls most of Ikea’s branches is rearranging its stores to adapt to the growing online business. Ingka Group said on Monday it was investing three billion euros (US$3.2 billion) by the end of 2023 to open new stores and modernize existing ones.
“The investment will allow us to renovate and reorganize the stores we already have”, Tolga Onku, retail operations manager of the Inka Group, which manages more than 400 of IKEA’s 500 or more stores around the world. AFP, As more and more businesses focus on shopping online, the company said in a statement that “our stores are one of our greatest strengths”.
But Onku also emphasized that physical stores are being revamped to support online purchases. He gave the example of an Ikea branch in Kuopio, Finland, which has been upgraded to support shipping online orders.
The three billion euros spent by the end of next year marks a step forward for Ingka, which invested 2.1 billion euros in its new and existing stores between 2019 and 2021. Major investments are planned in London of around €1.2 billion, and Ingka will continue to invest in markets considered mature, such as Spain and Germany.
Founded and headquartered in Sweden, Ikea is primarily owned by a complex structure of companies and foundations based in the Netherlands, Switzerland and Liechtenstein.
Traditionally, large-scale Ikea stores have been placed on the outskirts of suburbs or towns, but the furniture giant took a new model by opening its first city center store in Hamburg in 2014 and with a smaller offering in Paris in 2019. Opened up and started a change in strategy. ,
It also plans to open new stores in or near city centres, notably in Nice this week and in Stockholm this summer. The pioneer of home-assembled flat-pack furniture was founded in 1943 by Ingvar Kamprad, and has grown into a multinational company with presence in nearly thirty countries.
In early March, Ikea announced the suspension of its major activities in Russia and Belarus following Russia’s invasion of Ukraine. The move affected about 15,000 employees, 17 stores and three production sites, as well as 47 suppliers in Russia and 10 in Belarus. “Our business will be on hold until further notice,” Onku added AFP.
© Agence France-Presse
