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IKEA Group forms new company to expand shopping centres

IKEA store

2015 will be a big year for the Swedish brand IKEA, as the company is looking to expand the brand through its shopping centres, first introduced in 2001.

The IKEA group purchasing the left over 51% of the Inter IKEA Centre Group, that runs shopping centres in Europe and China, will allow IKEA to expand its shopping centres globally.

The transaction, expected to be closed by 31 December 2014, will give IKEA more control over their current shopping centres and will form a new global shopping centre company that will provide customers with a more convenient shopping experience. Erik Øster Pedersen, CEO of the IKEA group stated, “Forming one company will enable us to further strengthen the relationship with our visitors globally and work more efficiently”.

The group has already opened 14 ‘MEGA’ shopping centres in Russia, with locations based in areas such as St Petersburg and Novosibirsk in Siberia. The IKEA website states that there are 35m visitors to the Moscow locations every year, something Armin Michaely, managing director at IKEA Moscow puts down to the mix of brands and the MEGAs having, “a strong anchor in the Ikea stores”.

Full data has not yet been released for 2014, but with IKEA looking to expand, it leaves little doubt that 2014 has been just as successful as the year before. 2013 saw yearly revenue exceed expectations, as total revenues amounted to 28.5bn. This was an increase of 3.2 percent compared to 2012.

Alistair Davidson, Head of Staff for IKEA Group puts the company’s success down to tactfully spending and saving where necessary. On the IKEA website he believes financial achievements came from the company’s, “guiding principles, like earning money before we spend it” and by making investments with IKEA’s own resources.

With IKEA Centres being fully owned by the IKEA group, IKEA will be able to develop the shopping centres in its own way, still continuing to operate under different brands such as MEGA or Livat in China. A press release from IKEA stated that the company, “will own 31 shopping centres in Europe and China in addition to the existing 14 shopping centres in Russia. IKEA Centres will be a fully owned subsidiary of the IKEA Group, with 45 shopping centres in 11 countries”.

No shopping centres have been developed in IKEA’s top selling countries, Germany, USA, France and Sweden, leaving the company with some interesting decisions to make. The group expects to draw in 400m visitors per year with the changes leading Erik Oster Pedersen to state, “Where we find opportunities to grow IKEA stores together with a shopping centre activity, we do so.”

Though the group has no further comments at this stage, a spokesperson from IKEA said, “We are excited about today’s good news”, leaving an intriguing air of mystery as to what IKEA fully has in store for 2015.

Source: Rachel Gee at Retail Gazette.

Read the full news article here.

20 February 2015

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