(Yicai Global) Nov. 26 -- Ikea aims to double the number of its stores in China despite global redundancies at the Swedish furniture giant.
Ikea plans to cut some 7,500 jobs around the world over two years, though just 160 will go in China, a company representative told Yicai Global. The firm is undertaking a review to streamline operations, speed its transformation, strengthen investment in existing and new outlets and shore up its e-commerce platform, he added.
Despite China being the world's biggest furniture exporter, its domestic market is vast and expanding thanks to the burgeoning middle class and ongoing urbanisation. Ikea has 26 stores in the country. It racked up furniture sales of CNY14 billion (USD2.02 billion) there in 2017, according to a China Daily interview with the group's Chief Executive Jesper Brodin in July.
Ikea plans to invest EUR5.8 billion (USD6.6 billion) in global property development over three years including a more comprehensive experience center, creative apartments, hotels and office buildings.
The bulk of the investment will go toward Chinese megamalls called Livat Centers, which feature the firm's products. The malls are one of Ikea's three core sectors. It buys land and builds them independently, running three at present in Beijing, Wuxi and Wuhan, following a CNY10 billion investment. Footfall at these malls has exceeded 59 million a year, while sales of CNY6.5 billion in fiscal 2018.
The company will complete a CNY8 billion Livat Center in Shanghai in 2022, representing Ikea's largest single investment to date. The mall's offices will also employ 2,000 to 3,000 people from the parent company.
Ikea's layoff plan mainly includes positions in public relations, human resources, administration and other office areas. It will not involve store operations or distribution units. Not all of those singled out will leave the company as some will move to other posts. Ikea will open 30 new global stores and invest in logistics and digitalization, creating 11,500 jobs over two years.
Editor: William Clegg