IKEA to invest 400 million euros in French city center stores over three years

PARIS (Reuters) – IKEA plans to invest 400 million euros ($448 million)in France over the next three years as it builds up its new city center stores in the country, IKEA France’s chief executive Walter Kadnar said on Monday.

IKEA, the world’s biggest furniture retailer, is known for its vast self-service out-of-town stores, but it is transforming its business model to cater more for consumers who would rather order online and have items sent to their doors.

Kadnar unveiled the plans for France as IKEA – which had global sales of around 39 billion euros ($43.6 billion) last year – opened its first store in central Paris, in the Madeleine district which is popular with tourists and near many historic landmarks.

The opening comes as Paris grapples with “yellow vest” anti-government protests, although violence and vandalism related to those demonstrations has waned in recent weeks.

France is IKEA’s third largest market, after Germany and the United States.

IKEA employs around 10,000 people in France, where its sales rose 3 percent in the 2017/18 fiscal year to 2.83 billion euros.

Since taking over as group CEO in 2017, Jesper Brodin has led efforts to overhaul the IKEA business model to respond to the rise in ecommerce and customers who no longer have the time or the cars to drive to its out-of-town stores.