Ikea promises Rs 10,500 cr to set up 25 stores: All you need to know

Ikea promises Rs 10,500 cr to set up 25 stores, first store in Bangalore or Hyderabad

The world’s largest furniture retailer Ikea has plans to invest Rs 10,500 crore to set up 25 stores in the country over the next decade.

The new stores, each needing investment of around Rs 500 crore, will come in the cities like Mumbai, Delhi, Hyderabad and Bangalore, the Swedish furniture retailer said.

Ikea India has already got FIPB nod to invest Rs 10,500 crore.

“We are looking at investing around Rs 10,500 crore to set up 25 stores at a cost of Rs 500 crore each,” Ikea India chief executive Juvencio Maeztu told a retail summit here.

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“It is difficult to specify any time-frame when we will set up the first store, still I can say we are working on it and we are in talks with different states and are looking at all major metros for land as we require very large area of land that is near a highway,” he added.

Metros a priority for now

The company is likely to set up its first store in Bangalore or Hyderabad within the next couple of years. The company would require very large space as each store will be set up in an area measuring 3,50,000 sqft, he said, adding that it has not yet singled out any city for setting up its first store.

“For now, the priority is the right location and we are focusing on all major metros, the right location and the good price of land, which is important for us to start right,” he said.

Ikea plans its own retail real estate

Typically Ikea operates large format stores located on expressways close to large cities, where it sells various household goods such as flat pack furniture, furnishings etc at relatively lower prices.

According to a report in DNA, Ikeais scouting for land parcels asit plans to construct its own retail outlets spread over 5-6 acres.

Ikea plans to tie up with local suppliers for raw material for its forthcoming stores in the country, Maeztu said.

First store only by 2017

With Ikea taking the build, own and operate route, the first store is likely to take more time to get operational. Typically, Ikea operates large format big-box stores located on expressways close to large cities, where it sells various household goods such as flat-pack (ready-to-assemble) furniture, furnishings and cookware at relatively lower prices.

With inputs from PTI