Ikea repackages its Russian operations and plans to sell factories : NPR

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A man walks past the closed Ikea store in a Moscow mall on April 11.

Kirill Kudryavtsev/AFP via Getty Images


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Kirill Kudryavtsev/AFP via Getty Images


A man walks past the closed Ikea store in a Moscow mall on April 11.

Kirill Kudryavtsev/AFP via Getty Images

Swedish furniture giant Ikea is scaling back its presence in Russia, planning to lay off staff, close offices and sell factories.

This adds the world’s biggest furniture brand to the list of Western companies leaving Russia altogether as the war in Ukraine enters its fourth month.

Ikea opened in Moscow in 2000, with officials hailing “a new period of stability” in the country that presaged the growth of a Russian middle class.

In March, as Russia stepped up its invasion of Ukraine, Ikea and many others temporarily closed stores and suspended shipments of supplies. Ikea said at the time it affected some 15,000 employees.

Now, with the war showing no signs of ending, Ikea says it will “reduce” its business in both Russia and allied Belarus. This includes closing offices in Moscow and Minsk, cutting jobs, permanently closing its 17 stores and attempting to sell its four factories.

“Unfortunately, circumstances have not improved and the devastating war continues,” Ikea said in a statement. “Businesses and supply chains around the world have been heavily impacted and we don’t believe it is possible to resume operations anytime soon.”

Last month, global brands McDonald’s and Starbucks also said they would officially exit the Russian market, after 32 and 15 years in business, respectively. McDonald’s sold the roughly 800 stores to a Russian franchisee, which relaunched the chain on Sunday with a very similar menu but under a new brand “Vkusno i Tochka”, roughly translating to “Delicious, that’s all”.

For Ikea, Russia had been one of the fastest growing markets as shoppers clamored for its affordable home furnishings in the explosion of consumer culture that followed the economic calamity of the 1990s.

Ikea first welcomed Russian shoppers to a store in suburban Moscow in 2000 – just as President Vladimir Putin began his first term – and tens of thousands of people formed long queues to outside, traffic backing up for miles.

This week, the Dutch holding company Ingka, which manages Russian Ikea stores, announced that it would sell the furniture stock it still has in the country. Ingka, also a shopping center operator, has so far maintained its “Mega” branded shopping centers in Russia, previously saying it was about giving people access to essentials such as food and medicine.

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