Ikea freezes regional expansion
2010-08-30
The Swedish furniture retailer
Ikea has suspended its programme of regional expansion in Russia. The construction of the company’s shopping centre in Voronezh Province is to start no sooner than the end of 2011 due to internal problems: Ikea has experienced corruption scandal caused by company’s Russian top-managers. The company first expressed its intentions to construct a shopping centre in the city in 2005. In
2008, a 50-ha site on the outskirts of Voronezh was acquired and a schedule was put in place for the centre to open by 2010.
Other openings by Ikea have also been delayed. The launch of Mega-Samara, the construction of which was finished two years ago, is still being objected to by local authorities. In Ufa, an Ikea outlet was to be opened in autumn 2008, however, problems arose when the Federal Migration Service claimed to have found irregularities in the retailer’s employment of foreigners. Another project, the construction of a $1bn Ikea mall in Mytischi (Moscow Province), has not yet started yet due to difficulties encountered by the company in registering its design plans.
There have been no new openings by Ikea in Russia for 18 months now.
As Retail Update Russia reported in June 2010, Ikea also decided to freeze the construction of new outlets in Ukraine, the market which the company has been approaching since 2006.
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