New IKEA head says to speed new store opening, no numeric target

The new head of IKEA Group, the world’s biggest furniture retailer, said on Monday he would accelerate the pace of store expansion but would drop a numeric target for new outlets.

IKEA Group veteran Peter Agnefjall, who became chief executive on Sunday, stood by the target announced a year ago to double sales to around 50 billion euros (HK$511.9 billion) by 2020.

He told Reuters he expected to achieve that through around 5 per cent annual sales growth in existing stores, and another 5 per cent through new store openings, saying he preferred the sales growth target to a focus on the number of stores.

As the group unveiled the appointment of Agnefjall one year ago, his predecessor Mikael Ohlsson announced plans to increase pace of rolling-out outlets to 20 to 25 annually after holding back on store expansion.

“That’s not a particularly good measurement. A large store can turn around five times as much as a small store, and therefore it’s not a relevant figure to talk about,” the new chief said.

“That’s why we want to drop it that as a yardstick. It is not the primary one,” he said on the store opening target.

He however agreed with Ohlsson’s remark a year ago that the roll-out pace would pick up. In 2010/2011, IKEA Group opened seven stores and in 2011/12, 11 stores.