Ikea to spend €10 mln adding first Romanian store by april

Retail

Ikea, the world's biggest home- furnishing franchise, will spend €10 million ($12.7 million) to open its first store in Romania by early April.

Investment in the first year of operation may reach €20 million as the company hires as many as 400 people, Ikea's retail manager in the country, Cornel Oprisan, said today. Oprisan said he expects the Bucharest store to draw as many as 2.5 million visitors in its first year, or 10% of Romania's population, and sell products to 1 million of them. “If the operation proves to be extremely profitable, we plan to open another store within two years,'' Oprisan said at a news conference in Bucharest today. Retail sales are booming in Romania as the country prepares to join the European Union on Januar 1 and lower taxes, increasing commercial loans and rising wages spur consumers to spend more. Retail sales in the country rose 23% in the year through August, leading international chains including Carrefour SA and Metro AG to announce plans to boost investment there. Ikea's 26,000 square-meter Bucharest store will be operated by Moaro Trading SRL, which is owned by Netherlands-based Engma BV, Turkish Turkmall and Inter Ikea Systems BV, Oprisan said. The building Ikea will use for the store is owned by Moaro. Ikea manufactures as many as 750 items in Romania, including wood products, ceramics and textiles, according to Hendrik Notmeijer, the Balkans trading area manager for Ikea Supply AG. The store will sell 7,500 Ikea products. (Bloomberg)

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