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STOCKHOLM: IKEA said on Wednesday it would sell factories, close offices and reduce its nearly 15,000-strong workforce in Russia, the latest move by the world's biggest furniture brand to cut its operations there following Moscow's invasion of Ukraine.
"Unfortunately, the circumstances have not improved, and the devastating war continues. Businesses and supply chains across the world have been heavily impacted and we do not see that it is possible to resume operations any time soon," Ingka Group, which owns all IKEA stores in Russia, said in a statement.
It said it did not see any possibility to resume sales in the country in the foreseeable future.
Ingka, also one of the world's biggest shopping centre owners, is keeping its 14 malls in Russia, branded "MEGA", open though.
The Swedish furniture retailer is one of more than 1,000 Western companies to scale back operations in Russia since Moscow sent troops into Ukraine on Feb. 24.
Some companies have sold to local buyers, such as McDonald's Corp MCD.N, whose restaurants reopened on Sunday under new ownership and branding, while others have shuttered their stores for now. Read full story
In March, IKEA temporarily closed stores and paused sourcing in Russia, but has continued paying employees and will do so until the end of August. Read full story
Brand owner Inter IKEA, which is also in charge of supply, said it would start looking for new owners at its four factories and cut staff, but did not give further details. It has nearly 15,000 staff in the country.
"The import and export of IKEA goods in Russia and Belarus remains on hold," IKEA said.
IKEA opened its first store in Russia in 2000 and now has 17 stores and 14 shopping centres under its business there, it said.
The retail business remains paused, IKEA said but hinted that it may open the doors for Russians for a final time.
"To ensure necessary business processes, we are organising the sale of homeware goods that are in our warehouses to employees and customers. Dates will be announced soon," IKEA said.
The company's Russian representatives declined to expand on what this would entail.- Reuters