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IKEA Group CEO expects healthy growth to fund strategy shift

Reuters  |  STOCKHOLM 

By Anna Ringstrom

STOCKHOLM (Reuters) - Group will finance spending through healthy sales growth and existing capital over the next three years as the furniture giant adapts to fast changing shopping habits, its said.

IKEA, which is seeing the surge in and home delivery dim the appeal of its classic out-of-town warehouse stores, flagged last year it might add full-range city-centre showrooms to its channels.

Jesper Brodin, since September of Group, which owns the bulk of stores, confirmed in November he would focus on developing such formats alongside and services, and new said last month investment levels would stay high in coming years.

"To make this happen, our second priority is to be very ambitious on the growth side," Brodin told as he laid out his strategy plan for the three years through August 2021.

"Saved-up capital will be part of the financing, the other part will be about creating further capital through good healthy growth," he said in an interview.

Brodin saw sales growth at existing stores as well as from new formats, but said raising prices was not on the cards.

A new IT platform piloted in Britain will soon cater for more efficient and deliveries to customers, he added.

"We have closed the pilot and the aim is to have rolled out the new order orchestration and to all markets by February 2019," he said.

Group, which owns 362 stores and is the biggest franchisee to brand owner Inter IKEA, last year grew by 4 percent to 34.1 billion euros ($42 billion).

Brodin said Group would focus on growing in existing markets such as and the United States, with a particular focus on where a first store is planned to open in July.

Brodin said the group is currently in the midst of reviewing its store opening strategy, adding that some planned new out-of-town stores will now not happen, while others may be converted to the new city-centre formats.

(Reporting by Anna Ringstrom; Editing by Alexander Smith)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, April 10 2018. 23:54 IST