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IKEA is here: the Swedish giant has managed to hold on to its world market share and is now opening a new store in Sofia.

Fans of flat packs and affordable, streamlined home furnishings will be pleased to hear that IKEA will open its first store in Sofia at 216 Ring Road (Okolovrasten put), near the intersection with Bistrishko Chaussee Blvd on September 20.

The chain, which is renowned for its low-cost designs, currently has 324 stores in 38 countries-326 stores if you count forthcoming openings in Melbourne, Australia and Sofia-with more than eight million sq m of retail space worldwide. IKEA stores span Europe, the Middle East, the US, Asia Pacific and the Caribbean.

IKEA was founded in Sweden in 1943 by Ingvar Kamprad. The name IKEA stems from a combination of the first letters of Kamprad's name and the first letters of country houses and villages in which he grew up: Ingvar Kamprad Elmtaryd Agunnaryd.

Originally, Kamprad sold pens, wallets, frames, watches and sundry items that could satisfy customers' needs at low prices. Furniture was added to the IKEA product range in 1948 and in 1955 the brand started designing its own furniture. Initially, Kamprad was selling the products from his house and through mail order until he opened a store in Almhult.

This was the site of the first IKEA store and was used as the prototype for the next outlets.

Next, Kamprad started to send product catalogues through the milk truck. This led to the creation of the IKEA catalogues, the first of which were printed in Sweden in 1951.

The rest, as they say, is history. According to Forbes magazine, as of 2011 Kamprad--now 85 years old--is the 162nd wealthiest person in the world with an estimated net worth of $6 billion in 2011. Swedish business weekly Veckans Affarer, however, has claimed that he could be the world's richest man with an estimated wealth of between $50 billion and $90 billion, owning as he does the IKEA franchise through Interogo Foundation and Stichting INGKA Foundation.

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With too many stores to mention, a smattering of dates outlines the company's expanding empire. The first IKEA store in Sweden opened in 1958, in 1963 in Norway, in 1969 in Denmark, in 1973 in Switzerland, in 1980 in Spain and in the UK in 1987. In the Balkans, Greece's first IKEA store opened in Greece (Thessaloniki) in 2001, in Turkey (Istanbul) in 2005, in Romania (Bucharest) in 2007 and Cyprus the same year.

Defying the downturn

The IKEA chain had 699 million visitors during the 2010 fiscal year. Turnover for the fiscal year 2010 (September 2009 to August 2010) was 23.8 billion euro, coming from 22.7 billion euro in 2009, 22.5 billion euro in 2008, 20.7 billion euro in 2007 and 17.7 billion euro in 2006, so the rate of accelerating profit may have slowed with the crisis, but IKEA's position is still strong.

Apostolos Petalas, CEO of the Fourlis Group which partners the IKEA group and is responsible for the development of the IKEA concept in Bulgaria, Greece and Cyprus, praised the Bulgarian Ministry of Regional Development for supporting the new Sofia store. Speaking at a news conference on September 1, Petalas said that he believed that success would come from balancing the interests of consumers, business partners, employees, sponsors and society. Underpinning all this, he said, was IKEA's "passion for better living" and the company's key watchwords: integrity, respect and efficiency.

"Success is not only what you achieve, but how you achieve it," Petalas said.

Panos Katiforis, managing director of House Market S.A (an affiliate company) set out IKEA's longstanding and enduring global vision-to create a wide range of well-designed furniture and home furnishing projects at low prices so that as many people as possible can afford them.

Functional design

IKEA home furnishings are well-known for their modern and functional allure, although of course opinions vary about the quality of their merchandise. Before products are even constructed, a price is fixed and designs and suppliers are then tailored to the cost. Products are made in factories all over the world, in line with IKEA's strict quality specifications.

A large number of IKEA products are designed so as to be easily assembled by consumers. They are placed in "flat packs" that can be transported from the store to one's home. This is not just a gimmick-it helps to reduce ware-housing, transportation and assembly volumes and costs, resulting in a lower final price for consumers.

Every IKEA store offers 7500 products that are continuously renewed throughout the year.

The IKEA catalogue, first published in 1952, is distributed every September. In Bulgaria its distribution began on September 3. The Bulgarian IKEA catalogue presents about 3500 products and runs to 370 pages. Included are beds, pillowcases, desks, side lamps, wine glasses, laundry baskets, high chairs, baby foods, drying racks, cutlery, wardrobes, mirrors, shelves and sofas, to name but a few items. Next year's IKEA catalogue will be published in 31 languages and distributed in 39 countries.

Sofia store

The new Sofia outlet, occupying 29 000 sq m, will have 55 showrooms, a 630-seat restaurant, 7500 products, 19 check-outs (with mechanised sales options), more than 350 staff, 1200 parking spaces (850 covered and 350 open) as well as a free children's playground equipped with trained personnel. Customers can also visit a store with authentic Swedish food products, drinks and sweets.

Questioned by journalists, IKEA representatives declined to reveal employees' wages but said that the staff were well-trained and that preparations had been laid to deal with the kind of rush that ensued following the opening of cut-price supermarket Lidl.

Crucially, IKEA's representatives said they want to provide a fun day out for the whole family.

They declined to forecast turnover, preferring to see the first results, but said that 1.5m visitors were expected in the first year of business. Should this "footfall" transpire, then the IKEA store would be deemed a success irrespective of sales and plans to open another store in Varna will go ahead.

"If we don't achieve this, we won't bother about the figures," said Teo Mouratidis, IKEA's store manager in Bulgaria.
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Article Details
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Title Annotation:TALKING BUSINESS
Author:Hershman, Gabriel
Publication:The Sofia Echo (Sofia, Bulgaria)
Article Type:Company overview
Geographic Code:4EXBU
Date:Sep 9, 2011
Words:1013
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