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Ikea to invest €1.5 billion in India stores

Swedish furniture giant Ikea plans to invest a total of €1.5 billion ($1.9 billion) in building a chain of 25 retail outlets in India, according to an Indian government statement.

Published: 22 June 2012 17:46 CEST

Ikea to invest €1.5 billion in India stores

An initial investment of €600 million will be followed by a further injection of €900 million, the statement said, without providing a timeframe.

Ikea has no existing stores in India, which at the beginning of this year allowed foreign companies to own 100 percent of “single-brand” retail ventures, up from an earlier cap of 51 percent.

The planned investment in India was confirmed during a meeting Thursday between Ikea CEO Mikael Ohlsson and Indian Trade Minister Anand Sharma in Saint Petersburg in Russia, the government statement said.

It comes at a time when foreign corporate confidence in Asia’s third largest economy is low, due to slowing growth, new restrictive tax policies and a perception of government paralysis in enacting further reforms.

Several press reports put the investment timeframe at 15 to 20 years, with the Press Trust of India saying 10 stores would be opened in the first stage, followed by another 15 outlets.

Ikea had reportedly been worried about sourcing norms in India which require foreign retail firms to source at least 30 percent of their products from local companies.

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A file photo at Ikea in Aalborg, where 31 people stayed overnight during a snowstorm on December 1st 2021.

A file photo at Ikea in Aalborg, where 31 people stayed overnight during a snowstorm on December 1st 2021. Photo: Henning Bagger/Ritzau Scanpix

Anyone who has found themselves wandering the mazy aisles of an Ikea might be able to empathise with the sense of being lost in the furniture store for a seemingly indefinite time.

Such a feeling was probably more real than usual for six customers and 25 staff members who were forced to spend the night at the furniture giant’s Aalborg branch after being snowed in.

Heavy snow in North Jutland brought traffic to a standstill and halted public transport in parts of the region on Wednesday afternoon, resulting in a snow-in at Ikea.

“This is certainly a new situation for us,” Ikea Aalborg store manager Peter Elmose told local media Nordjyske, which first reported the story.

“It’s certainly not how I thought my day would end when I drove to work this morning,” Elmose added.

The 31 people gathered in the store’s restaurant area and planned to see Christmas television and football to pass the evening, the store’s manager reported to Nordjyske.

“Our kitchen staff have made sure there is hot chocolate, risalamande, pastries, soft drinks, coffee and the odd beer for us in light of the occasion. So we’ll be able to keep warm,” he said.

“We couldn’t just send them outside and lock the door behind them at our 8pm closing time. Absolutely not. So of course they’ll be staying here,” he added.

The temporary guests were given lodging in different departments of the store in view of the Covid-19 situation, Nordjyske writes.

“For us , the most important thing was to take care of each other and that everyone feels safe,” Elmose said.

At least Ikea’s stranded customers and staff had somewhere comfortable to lay their heads.

The same can unlikely be said for around 300 passengers at the city’s airport who had to stay overnight at the terminal.

The airport was forced to stop flights from 2:30pm yesterday amid worsening weather, which also prevented buses from transferring passengers to hotels.

“We have around 300 people in the terminal right now and have been giving out blankets on the assumption they will be staying here tonight,” Aalborg Airport operations manager Kim Bermann told Nordjyske.

READ ALSO: Ikea reopens in Denmark after country’s worst retail month this century

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