IKEA is downsizing its operations in Russia – Izvestia

The furniture giant will sell its factories in the country, reports Izvestia

The iconic Swedish furniture brand is closing down its business operations in , the newspaper Izvestia reported on Wednesday, referring to its sources.

According to the daily newspaper , the company informed its employees during a general meeting and will soon announce the decision. IKEA has not addressed the plans for its stores in the country, but their online store will reportedly continue to operate.

The company’s press service confirmed the reports and told the business daily RBC that IKEA would reduce the scope of its operations in Russia, lay off some of its employees and start looking for new owners for all four Russian factories in the Leningrad, Kirov and Novgorod regions.

“IKEA’s retail operations in Russia are still on hiatus. This decision will involve optimization, which will also affect many employees,” said the press service. The company owns 17 stores and 14 malls throughout Russia.

The company noted that it would organize the sale of household items in stock, and dates will be announced later on IKEA’s website.

The press service emphasized that the situation with supply chains and business processes around the world has deteriorated significantly in recent months.

“In view of this, we do not see the possibility of resuming sales in the foreseeable future. [the company] decided to reduce the scope of operations in Russia. This is a difficult decision, but we believe it is necessary, said the press service reportedly.

READ MORE: Russia promises to “take care of” foreign companies

According to Russian Deputy Minister of Industry and Trade Viktor Evtukhov, IKEA plans to pay seven months’ salary in compensation to employees who lose their jobs.

Russia was IKEA’s tenth largest market during the year until last August. At that time, retail sales amounted to $ 1.8 billion, or 4% of the company’s total retail sales. In March, the furniture manufacturer joined a number of international companies by stopping operations in Russia due to -related sanctions.

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Source: sn.dk




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