IKEA cuts down business in Russia; Local furniture chains eyeing shuttered stores

IKEA's shuttered stores and warehouses in Russia are reportedly being eyed by local furniture chains - Tvoi Dom and Hoff. The Russian brands are both interested in acquiring the Swedish-founded, Dutch-headquartered furniture retail company after it has curtailed its business in the country.

As per Reuters, IKEA's assets in the Vladimir Putin-led country are now up for sale, and many local firms have already expressed interest in them. The company initially closed down its store outlets in March after Moscow ordered its soldiers to attack Ukraine with the intention of invasion.

In response to the action, sanctions from the West were imposed on Russia. Since then, major companies and global brands have been withdrawing their business operations.

Following its temporary closure four months ago, IKEA was not able to re-open and finally made the decision to just sell its factories, and this was revealed last week. When the sale was announced, Russian companies are joining the bid to buy the furniture retail firm's assets.

"Management is ready to consider commercial proposals for the acquisition of IKEA's assets - retail and production sites," Amina Tagieva, Tvoi Dom's spokesperson, told local publication Tass and other news agencies on Friday.

While it released a statement regarding its acquisition attempt, Tvoi Dom did not disclose any other details about it. In any case, IKEA is also exploring different options on what it should do to its 17 shuttered furniture outlets. IKEA still continues to pay its workers since its closure in March and with its move to sell its assets, the company will reduce the size of its 15,000-strong workforce.

"On 3 March, Inter IKEA Group and Ingka Group announced the pausing of IKEA operations in Russia and Belarus as a consequence of the war in Ukraine. Since then it has been a priority to provide support and security to co-workers, and the groups of companies have been able to guarantee 6 months' salary for all co-workers, as well as core benefits," IKEA said in an announcement explaining its decision to scale down its business in Russia and Belarus.

The company went on to say, "Unfortunately the circumstances have not improved and the devastating war continues. Businesses and supply chains across the world have been heavily impacted and we do not see that it is possible to resume operations any time soon."