Ikea, the Swedish furniture chain, joins the multinational companies that have paused their operations due to the conflict in western Europe. The retailer reported that it will close its stores in Russia and suspend all purchases in the country and in its ally Belarus.
“These decisions have a direct impact on 15,000 IKEA employees. The ambitions of the business groups are long-term and we have ensured employment and income stability for the immediate future and we provide support to them and their families in the region”, detailed the company.
The company shared in a statement that Inter Ikea Group will also suspend all exports and imports into and out of Russia and Belarus. In addition, to pause all production operations of Ikea Industry in Russia, which means that all deliveries from all sub-suppliers to these units are on pause.
In addition, Ingka Group has made the decision to suspend all Ikea Retail operations in Russia, while the Mega Mall will remain open to ensure that many people in Russia have access to their daily and essential needs, such as food, groceries and pharmacies.
“The war has already had an enormous human impact. It is also causing serious disruption to the supply chain and business conditions. For all these reasons, the groups of companies have decided to temporarily stop Ikea’s operations in Russia,” he said in the statement.
Following the announcement, the director of retail sales for the Ingka Group, which owns Ikea stores, told Reuters he now expected to raise prices by an average of 12% this fiscal year, up from 9% previously, because of rising prices. of raw material costs and supply chain disruptions experienced around the world.
Then, the company shared that the main consequences on prices will be felt above all in North America and Europe, while in Mexico there is a lack of inventory, both in the Oceania store, in Mexico City, and in its e-commerce.
With information from Reuters.
