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Sep, 09 2015

IKEA to open 25 stores, most likely first in Hyderabad by 2017

Swedish furniture retail giant IKEA has started hiring in India as it gears up to open its first store in the country by 2017.

Swedish furniture retail giant IKEA has started hiring in India as it gears up to open its first store in the country by 2017. The company has earmarked Rs 10,500 crore investment for the country to open 25 stores over a decade and has already acquired land in Hyderabad where it is most likely to open its first store.

"We have started (hiring) but of course there are few positions. We are preparing everything and in the next few months we will expand and we will have to do more employment," IKEA India CEO Juvencio Maeztu told PTI on the sidelines of Economist India Summit in New Delhi.

"You can have in between direct and indirect employment more than 2,000 people. May be 700 people would be employed in the store and then you would have double the amount of that when it comes to all services we do as home delivery, assembling and operation. This would be without taking into consideration the "impact which we create on supply chain," he said without sharing the total number that IKEA is planning to hire in India.

Commenting on the timeline for opening of the company's first store in India, Maeztu said it would not be earlier than end of 2016. It takes at least a year and a half to get the whole thing running. It could be 2017.

Asked if Hyderabad would be the place for the first store in in India, he said: "It is a reality that we have bought land in Hyderabad. So, (it is) likely it can be our first store (but) we are moving in parallel in Karnataka, Maharashtra and Delhi NCR. We are moving parallel in these four (areas)."

He said the company will invest about Rs 500 crore per store and requires about 12 acre land for a store.

On the possibility of using the fast growing online sales channel, Maeztu said that it has to develop the channel in the long term and not in immediately. We are not an e-commence company. We are a single brand retailer based on brick and mortar store. We need to add more channels and this channel approach is good for the consumer and to boost the production. This has to be developed in the future.

When asked about challenges of doing business in India, he pointed out land acquisition as one but added the company has not changed its business model due to that.

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