IKEA aims to be profitable by FY'28, to open 25 new small & medium size stores in next 4-5 years

New Delhi, Mar 5 (PTI) Swedish furniture retailer IKEA, which is expanding in India through an omnichannel approach, expects its operation in the country to be profitable by the end of FY'28 and plans to add 25 new small and medium format stores in the next four to five years, a top company official said.

This will be done by growing topline, opening more stores, reducing the size of fixed costs, and operating more efficiently, in addition to increasing local sourcing, IKEA India CEO Patrik Antoni told PTI.

"We have an ambition to be profitable by the end of FY28," he said.

For that, IKEA in India is working on several vectors, such as growing the topline and opening more stores. "But we will also be better at the stores... We will get better at what we do at the stores. Be more operationally efficient. Be better to serve our customers and create better solutions for them." "All that will drive topline and margins that you need on the top," said Antoni.

According to Antoni, India is among "one of the top three priority countries" of the Swedish furniture and home furnishing retailer, where they "want to make a breakthrough." According to the latest annual filing by IKEA India before the RoC, it has reported a widening of its total loss to Rs 1,299.4 crore in FY'25, and its revenue from operations was also down 3.33 per cent to Rs 1,749.50 crore.

IKEA India's total borrowing has also increased in FY'25 to Rs 8,335.20 crore as the company is investing to expand its network though omnichannel approach.

IKEA, which sees a "long-term potential" in India, is working on an omnichannel approach, which, according to Antoni, is helping to keep operating costs low and combines that physical presence with online experience.

"We will open another 25 stores in the coming four or five years. So we have now have full speed on the expansion," he said, adding that these new stores "will range from 2,500 sq feet to 20,000 sq feet depending on their location." IKEA's last large format store in India was at Bengaluru, measuring 4.6 lakh sq ft, while its two coming stores in Delhi NCR at Noida and Gurgaon at its Lykli centres are in the two lakh sq ft range.

"We are scouting land plots both in Delhi and Bangalore, and if we get the right possibilities, there might be one more," he said.

As per its growth strategy, Ikea has altered its growth strategy in India, by opting for smaller store sizes for its expansion in smaller growth cities and be accessible to more people.

IKEA on Thursday opened its first city store in Pune, spread across 32,000 sq ft. IKEA had already entered Pune through online deliveries six years ago.

When asked as to whether Ikea is planning to have a pan-India presence through online deliveries, Patrik said it is focusing on markets which can be catered to through six big cities, where it has a presence.

"Today, we are present in about 80 markets around India. Six major markets we see are, of course, the big cities, Delhi, Mumbai, Bangalore, Chennai, and Hyderabad. Those are the six big cities, and we are growing around them," he said.

Currently, Ikea is operating three large-format stores in Hyderabad, Navi Mumbai, and Bengaluru, two city stores in Worli and New Delhi and is investing around Rs 7,000 crore to enter the National Capital Region with two stores in Gurugram and Noida.

With these developments, IKEA's FDI limit has almost reached the target.

In 2013, the government had approved an FDI proposal of Rs 10,500 crore by Ikea to set up 10 stores with allied infrastructure over 10 years.

Last month, at the launch of its online sales in Tamil Nadu, Antoni had said that the company would amplify its investment in India. PTI KRH DRR