The logo of IKEA is seen outside its under construction store in Hyderabad, India.
Credit: Reuters File Photo
Swedish furniture maker Ikea expects its Hyderabad store, the first in the country to achieve operational breakeven soon, the company said on Monday without providing the revenue details.
Hyderabad store which was opened in 2018 has witnessed a footfall of three million during the last 12 months period against 2.90 million a year before.
However, the figures are not comparable as last year and period before that witnessed a lot of movement restrictions due to Covid-19 pandemic.
Speaking to media, Ikea India CEO Susanne Pulverer said the firm is exploring different formats of stores in terms of size, to penetrate the market and get closer to people where they live. It would also be complemented by online services.
“I mean when we invest, the first years of investment of this size, it's not profitable and that is common when we foray into new markets. So, of course Hyderabad is the store we are looking and working on to get to break even soon,” Pulverer said.
She hinted that the store can become profitable by next year. However, she did not affirm it.
The official further said the firm has made a commitment to invest Rs 10,500 crore in the Indian market and that amount will be exhausted once the two formats in Delhi (Noida and Gurugram) are completed.
Ikea currently has three big format stores operational in Hyderabad, Navi Mumbai, and Bengaluru and two city stores in Mumbai.
When we look at projects in Delhi-Noida and Gurugram we can see that we have booked all these Rs 10,500 crore. They are not fully spent, but with these projects that are in the pipeline it will be, we have invested all of it. So, the next phase is of course looking at new investments that we are currently working on,” she explained.
Meanwhile, the home furnishings retailer on Monday said it is celebrating five years of retail operations in India.
A press release from Ikea said the company employs 3,000 coworkers today in all its markets and the aim is to reach 10,000 in the coming years with 50 per cent gender diversity. In its stores, the company employs close to 70 per cent of coworkers from the local neighbourhood.
Local sourcing is a priority to become even more affordable with ambition to reach 50 per cent in the coming years, it added.