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IKEA expected expansion will now slow

Monday, 02 September 2013
The new Chief Executive Officer of Ikea, the world largest furniture retailer has decided to slow down the rate of growth of the company's expansion rate. This comes after his predecessor had  pledge to double the pace of store openings something now being described as a power  and strategy shift

According to the Swedish business daily, Dagens Industri, referring to the Financial Times,  IKEA's former CEO, Mikael Ohlsson's goal was to double the rate of expansion of stores to between 20  and 25 new Ikea store per year. But the new CEO Peter Agnefjäll want to downplay that goal and instead focus on improving existing stores, hoping that Ikea could increase its sales by 10 per cent a year thereby double its annual revenues to about €50bn by 2020.
This year, Ikea just opened five department stores worldwide; according to Peter Agnefjäll is a "record" number. He wants that figure not to be higher. The expansion was even opposed by the founder Ingvar Kamprad some months ago.

Ingvar Kamprad as well as former managers at Ikea had expressed concern about that the cherished corporate culture in the company would be difficult to manage with too rapid expansion of new stores in markets such as India and China according t the reports.

The Financial Times described the Ikea management culture as the "strong corporate culture which comes from its roots in rural southern Sweden where thriftiness is a virtue, and Mr Kamprad’s emphasis on shared moral values among employees."

Previous big pushes into Japan and the US in the 1970s and 1980s had to be halted after difficulties amidst various scandals in its corporate structure that attempted to tarnish the company's reputation.

Expansion however is said will take place primarily in existing markets, including Sweden, the company had previously said in past reports.
By Scancomark.com Team

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