Hundreds of applications for IKEA franchise

IKEA, the Swedish furniture company that opened its first store in Romania last month, has revealed that the first application it received for a franchise in Romania came shortly after the revolution in 1989.
“I believe the first application we received for a franchise in Romania dates back to 1993 and there had probably been other applications before that date. We believe several hundred applications have been filed for a franchise here since 1993,” recounts Hans Skalin, supervisory director with Inter IKEA Systems B.V. in a recent interview with ZF.
Inter IKEA Systems B.V. is the owner of IKEA concept and controls the franchising rights for IKEA. Internationally IKEA stores are part of a group controlled by this entity.
The franchise holder in Romania is Moaro Trading, on the basis of an agreement with Inter IKEA Systems B.V.
Moaro’s shareholders are the Engma Dutch investment consortium, 75% of the shares, Turkmall (also Dutch), over 24%, and Inter IKEA Systems B.V., less than 1%, according to the Trade Registry data. Michael Lloyd, CEO with Baneasa Developments controls the consortium Engma.
“There had been no application for this store, we simply met these people and we liked one another,” confesses Hans Skalin.
The Swedish retailer did not enter the domestic market unexpectedly as it is well known that the company waits until the target market is mature enough and the middle class is sufficiently developed.
IKEA concept means furniture items and furnishings at low prices. One of the reasons the company enjoys worldwide popularity is its policy of retailing at a very low price.
Beginning with the opening of an office in 1992, the Swedish furniture company entered the domestic market gradually. IKEA acquires furniture from over 40 suppliers most of which manufacture exclusively for the furniture retailer.
Beside the office, IKEA also owns Swedwood plant of Siret, Suceava county. Swedwood is IKEA’s independent production unit, while Trading is the procurement one.
The total value of acquisitions of IKEA on the domestic market exceeds 200 million euros. The first IKEA store in Romania opened on March 21, 2007 and in the first five days posted sales worth 1.8 million euros and recorded 115,000 visitors. The store is located in Baneasa Shopping Area of Bucharest and totals 26,000 square metres in surface area.