IKEA to invest RM120m in centre

BY SABRY TAHIR

IKEA Malaysia, which plans to achieve up to RM500mil in sales in the next five to six years, is investing RM120mil to develop Power Centre, a three-storey retail complex next to its newly opened flagship store in Mutiara Damansara, Kuala Lumpur. 

IKEA Group of Companies chairman Hans Goran Stennert said Power Centre was an American term for a cluster of major retail players in a single location with only a few smaller supporting retailers. 

He said 80% of the retail complex, which has a built-up area of 45,000 sq m, would be occupied by anchor tenants. IKEA, he said, had already identified two anchor tenants - the operators of Cold Storage supermarket outlets and Australia-based electrical and furniture chain store Harvey Norman. 

Hans Goran Stennert outside the IKEA store in Mutiara Damansara

“Power Centre is aimed at complementing our home furnishing store and providing long-term recurring income,” he said after the launch of IKEA's store in Mutiara Damansara, Kuala Lumpur yesterday. 

Power Centre, which will open in December, is linked to IKEA store via the car parks to both premises. 

Stennert also said the new RM180mil IKEA store, the biggest IKEA Store in the Asia-Pacific and 36,000 sq m in size, would be generating RM400mil to RM500mil in annual sales in the next five years. 

IKEA has estimated sales at its newly opened flagship store at RM180mil in its first year of operations from RM130mil projected for the year ending Aug 31. The company achieved sales of RM125mil in 2002.  

“IKEA’s vision is to create a better everyday life for the many people. 

“We do this by offering a wide range of well designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them,” he said. 

The new store is IKEA’s 184th worldwide. 

Stennert said Malaysia had always played a big part in the success of IKEA’s vision, particularly in Asia-Pacific.  

“Through the personal interest of our founder, Ingvar Kamprad, we have been purchasing Malaysian-made products for IKEA worldwide since 1984,” he added. 

Going forward, IKEA will be setting up stores in Johor and Penang.  

IKEA Malaysia general manager Joseph Lau said the new store, which carried more than 7,000 home furnishing products compared with 4,000 items at the previous store in Bandar Utama, has the capacity to carry about 10,000 items. 

The store's relocation was mainly to cater to the increasing demand for IKEA products. 

Stennert said over the last three years, IKEA group had invested more than RM400mil in Malaysia, including more than RM230mil on its international procurement centre (IPC) in Shah Alam.  

The IPC is Asia’s largest single purpose built distribution warehouse. 

IKEA group currently employs about 1,000 workers in Malaysia.