ZF English

IKEA sells 40 million euros' worth of decorations at Baneasa store

IKEA sells 40 million euros' worth of decorations at Baneasa store
29.09.2008, 21:19 15

Furniture and interior decorations retailer IKEA, which operates only one store in Romania, posted sales worth 99.4 million euros on the domestic market from September 2007 through to August 2008, up 24% on initial forecasts.

"We hope we'll exceed 110 million euros from sales by the end of 2009," said Cornel Oprisan, retail manager of IKEA Romania, which translates as a 10% increase against the previous fiscal year.
The Swedes launched operations in March last year, after a 25 million-euro investment in a 26,000 square metre store in Baneasa shopping area. According to data on the Finance Ministry's website, IKEA posted 15.2 million RON (4.6 million-euro) profit and 195.8 million RON (58.7 million-euro) turnover in the first nine months that ended last December.
From September 2007 through August 2008 (IKEA's financial year, which also corresponds to the period the catalogue is valid), the best-selling products on the furniture segment were the Pax storage solutions (19,700 units sold), Billy modular bookshelf systems (15.600 units) and Faktum kitchen systems (13,600 units). As for decorations, the top sellers were Sparsam light bulbs (230,000 units), Mysa and Gosa quilt and pillow series (180,000 units), as well as IKEA 365 plus products - pots, pans, jars and kitchen utensils (76,560 units).
IKEA's revenues in the 2007-2008 financial year were also helped by the sales generated by the restaurant. IKEA sold 2.5 million Swedish meatballs, 1.2 million hotdogs, and more than 227,000 Almondy desserts.
The IKEA store on the local market is a franchise held by Moaro Trading. The shareholders are the Dutch investment firm Engma, 75%, Turkmall (Netherlands), over 24% and Inter IKEA Systems B.V, less than 1%, according to Trade Registry data. Behind these entities is businessman Gabriel Popoviciu.
The presence of the IKEA group on the domestic market also entails a representative office, whereby the Swedes buy furniture from the local producers. IKEA also had a production facility in Romania until the end of August, Swedwood, which is now closed, with the company now seeking a buyer for its facility in Siret. Swedwood representatives blamed the decision to close the unit on a 70% increase in the cost of raw materials, after the factory generated total losses worth 10 million euros from 2005 through 2007.
Swedwood launched a 12 million-euro investment in a solid wood furniture factory in 1999, but there was also talk of a 35 million-euro investment that was supposed to complement the facility and was to have produced timber and board in Suceava, an investment that never materialised.
Swedwood decided to close the facility last month, which means approximately 500 people will lose their jobs.
With the closure of the factory in Suceava county, IKEA will also drop production of a range of solid wood furniture, sold mainly in Western countries.
Three ranges were being made in Siret - Markor, Lexvik and Stranda, one of which (the Swedes did not say) will be discontinued. The decision, however, was made prior to the closing of the factory in Siret.