IKEA Shrugs Off New Lockdown In Home Improvement Boom
Furniture and homewares conglomerate, IKEA, expects the second round of lockdown measures to have less of an impact on business, as it ramps up production to meet home improvement demand.
The news comes as the Swedish giant continues to expands its electronics and smart home arsenal (e.g. smart lights, smart speakers and smart blinds).
Speaking to the Financial Times, IKEA CFO Martin van Dam states the second round of COVID19 lockdowns is “incomparable to the first one.”
Advising there may be slower sales, he asserts it won’t have the inefficiencies of ceasing production like the first round.
IKEA has reportedly asked suppliers to work extra shifts in recent months, as it seeks to fulfil pent-up demand left by the first lockdown, coupled with a boom in home improvement products.
The trend has been mirrored in Australia, with local consumers seeking to refresh their interiors during work-from-home and lockdown conditions.
IKEA has reportedly temporarily closed 1-in-10 of its global outlets, however, the commercial impact has been mitigated by click-and-collect plus other fulfilment initiatives.
The world’s largest furniture retailer is also said to have offered financial aid to select suppliers (e.g. loans/prepayments) to ensure ceasing production would not lead to their end.
Like many Australian retailers, Mr van Dam states IKEA is heavily investing into the capabilities of its online store. It recently opened an ecommerce store in China, and is conducting its first test of selling on a thirty-party website (Alibaba’s Tmall).