Tue, Dec 14, 2004 - Page 10 News List

IKEA announces blueprint for six more outlets


After 10 years of operating in Taiwan, Swedish home furnishing retailer IKEA announced yesterday aggressive expansion plans for the next five years, starting with a second store, to be launched in downtown Taoyuan this Saturday.

The 4,500-ping (15,000m2) free-standing building, painted in IKEA's logo colors of blue and yellow, marks the company's first step toward opening six mega-size concept stores by 2009, with three more planned for northern Taiwan, one in Taichung and one in Kaohsiung.

The third outlet will be launched in Hsinchuang, Taipei County, in the fourth quarter of next year.

"The home furnishing market in Taiwan is still developing in the initial stage," said Brian Tuson, chief executive officer of IKEA Taiwan, at a press briefing yesterday to introduce the Taoyuan store.

"Based on our experience exploiting the Taiwanese market over the past decade, we know there exists a great potential here and the development direction IKEA is taking will be successful," he said.

After Jardine Matheson Group (怡和集團) opened the first IKEA store in Taipei City in 1994, the Swedish brand saw its management change hands to the group's subsidiary, Dairy Farm Company Ltd (牛奶公司), in 2002, which decided to take a more aggressive approach on business expansion.

With NT$300 million (US$9 million) invested in the Taoyuan outlet, Tuson expects the store to break even in two to three years, with total annual sales next year of NT$3 billion, double this year's estimated revenue figures.

Taking advantage of the spacious business area, the new store will feature 6,500 items, 560 free parking spaces and a floor devoted to furniture, where consumers can pick up large furnishing items before moving to nearby checkout counters.

To better communicate with its shoppers, Tuson said Taiwan would become the world's first market to launch the IKEA card program. He expects 90 percent of customers will apply for membership.

"The program does not offer discounts or privileges, however, because shoppers should be given the best prices anyway," he said.

IKEA will provide some incentives to cardholders, such as holding free in-store creativity courses and delivering free magazines, to pass on home furnishing knowledge to customers, said Justine Yao (姚以婷), IKEA's marketing director.

Other retailers are also planning expansions.

To grab a bigger market share in the competitive market next year, B&Q Taiwan plans to open two or three stores on top of its 18 outlets, HOLA will launch two more stores to bring its total number of outlets to nine, and MFI International Taiwan Co (三商美福家具) expects to add four more stores in central and southern Taiwan, bringing its number of outlets to 19.

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