Ikea to open 6 stores in 6 years

The second Ikea store in Romania will be opened in the fall of 2008, and its location is to be announced by the end of September, after the land is acquired. The company is considering three locations, but Oprisan declined to reveal Ikea’s plans, due to the “swirling” real estate market. “Prices boom when word is out that a large company is interested in a piece of land,” said Oprisan, who needs 26,000 square meters.

Six months after the first Ikea store opened in Romania, company officials announced sales worth €40 mln, “70-75 percent higher than the initial forecasts”, according to Oprisan.

Ikea estimates €94.5 mln in net sales in their first year on the local market, half of which comes from furniture and the other half from decorations and accessories.

However, the initial €25 mln investment was not covered yet. “Usually it takes five years to amortize an Ikea investment, it will probably take us only four,” added Oprisan.

In six months, in the store located in the Baneasa neighbourhood, in northern Buchaest, 1.4 mln customers bought a total of 4.6 mln products.

After launching the 2008 catalogue in September 2007, the number of Ikea visitors increased by 40 percent, according to the company’s Marketing Manager, Mihaela Muresan. One of the reasons is the 12 percent price reduction, following logistics improvements. Oprisan said the company will not manage to obtain such spectacular figures in the future but it will continue to cut back prices. Also, supply-related problems have been partially solved: the 20 percent stock lack came down to only 4 percent. Of Ikea’s clients, only 1 percent have returned products, but most of them chose other products instead, said the company’s Retail Manager, and one third requested the company’s transport and wrapping services.

Ikea plans to expand its product portfolio to 8,000 products from the current 7,500. The company also prepares a series of “rewards” for loyal customers, which will translate into new services added, Oprisan said.