IKEA Selling Production Assets and Shut Down Logistics Offices in Russia

November 14, 2022  by HFBusiness Staff in Business Strategy, Industry   

According to the SPARK-Interfax analytical system, the decision to shut down the subsidiary was made at a meeting of the LLC participants on Nov. 10. Dmitry Churin was appointed its liquidator (according to SPARK data, in Sept. of this year he also acted as liquidator of the Russian subsidiary of another company - the Finnish glass processing technology supplier Glaston Oyj Abp).

IKEA Purchasing Services Russia belongs to IKEA Supply AG (95%) and IKEA Supply Services Holding AG (5%), which are registered in Switzerland.

The LLC focused on the creation and use of databases and information resources, real estate management and the provision of intermediary services in its evaluation.

At the end of 2021, IKEA Purchasing Services Russia yielded revenue of 454 million rubles (approximately 7.4 million US dollars) and a net profit of 31 million rubles (approximately 505,000 US dollars).

Since March of this year, IKEA has been gradually winding up its operations in Russia. In the report for fiscal year 2022, which was published in early November, the Swedish retailer confirmed that by the end of the current calendar year it intends to finally shut down its procurement and logistics offices in Moscow and Minsk.

The document also said that the company expects to complete the sale of its four factories in Russia by the beginning of 2023. These comprise one factory located in Tikhvin, Leningrad Region, two factories in Veliky Novgorod and another in Krasnaya Polyana, Kirov Region.

The company has not announced the sale of its retail business yet, as the Russian Industry and Trade Ministry has repeatedly said it has not received any notices from IKEA regarding the sale of its retail assets.

According to Interfax sources, the due diligence process was completed for the IKEA factories in early November. The IKEA Tikhvin Trade Union's VK page, citing IKEA's statement, said there are four bidders for the purchase. One of them is likely to be AFK Sistema (Tvoy Dom, Hoff and Kronospan as well as PIK Development Group were previously mentioned in the media as other interested parties, however, the latter has officially denied any plans to purchase the assets of the Swedish company).

Last week, a representative of Sistema confirmed to Interfax the corporation's interest in the IKEA factories, as well as the survey of these enterprises.