Peter Agnefjäll, the newest IKEA CEO, wants to grow the company at a slower, more controlled pace. Mikael Ohlsson’s plans, the previous CEO, to double the number of new stores to some 25 stores a year, will be scaled down again.
Supporting existing stores first
Agnefjäll, who took over early September, prefers to invest in the current 300 stores, hoping to increase IKEA’s turnover ten percent per year. That should enable the furniture chain to double its turnover to some 50 billion euro (65 billion dollars) by 2020, as explained in an interview with business publication, The Financial Times.
These plans fit the wishes of IKEA’s 87-year-old founder, Ingvar Kamprad, who felt the need to publicly react against Ohlsson’s expansionistic views.
“I have been present at all but one board of directors. We had a complete agreement on the 10 percent growth per year and the recommendation that half of that growth should come from the current stores and half from new stores. Opening 20 to 25 stores a year is not something we agreed upon. I believe the amount of new stores will be lower than what management announced, maybe ten to twelve”, stated Kamprad.
Fear of history repeating itself
Kamprad and Agnefjäll wish to avoid a repetition of what happened in the seventies and eighties. A overzealous expansion in Japan and the United States created problems, which led to a slower rate of new stores in India and China.
Agnefjäll believes a slower rate of new stores better fits the culture and vision of IKEA.