Ikea completes sale of Russian factory to local firm
SWEDISH furniture giant Ikea said on Monday (Mar 27) that it had sold its factory in the Russian city of Novgorod to local company Invest Plus, more than a year after pausing its activities in Russia over the conflict in Ukraine.
Ikea halted all retail and production operations in Russia – along with scores of other Western companies – soon after Moscow sent troops into Ukraine on Feb 24, 2022. It briefly resumed online sales in the middle of last year, and part of the company still operates 14 Mega-branded shopping malls in Russia.
In February, Russian media reported that Ingka Group, the owner of most Ikea stores, had started looking for buyers for the malls.
“The (Novgorod factory) sale process has been structured and step-wise, in order to find a new owner with a strong plan and capability to develop the business,” brand owner Inter Ikea Group told Reuters.
The parties did not disclose the sum of the deal nor details regarding its terms.
“The process of concluding the deal was not easy and quite lengthy,” Invest Plus chief executive officer Vadim Osipov said. He thanked all parties involved: Ikea, Russian and Swedish regulators, as well as Russia’s Ministry of Industry and Trade.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
“Our goal is to return the highly popular and quality production of the Novgorod factory to Russia’s furniture market as quickly as possible,” Osipov said.
Exits by Western companies have been complicated, as deals involving companies from so-called unfriendly countries – those that imposed sanctions against Russia – require approval from a government commission.
Invest Plus is a special-purpose vehicle, beneficially owned by Osipov, who is also the chief executive officer and co-owner of Slotex, a leading domestic producer of laminates and kitchen worktops.
The Russian government approved the sale to Slotex in February, also giving lumber manufacturer Luzales the right to finalise a deal for two other plants.
The Novgorod factory was the largest of Ikea’s former production units in Russia, Invest Plus said, adding that the facility is able to produce more than seven million cabinets and kitchen furniture units per year.
The company has retained the backbone of the factory’s workforce and said it would guarantee jobs for at least a year. It added that it expects to resume full production in the next two to three months.
Share with us your feedback on BT's products and services
