Retailing, Franchising, and Consumerism Business Intelligence in China

Ikea To Close Three Trade Offices In China

Swedish furniture retail giant Ikea has announced that it will close its trade offices in Chengdu, Wuhan, and Xiamen and employees in these three offices will be dismissed.

Ikea told local media that this decision is the company's efforts to integrate its purchasing businesses in China. In the future, its trade offices in Shanghai, Qingdao, and Shenzhen will also be affected.

According to Xu Lide, the public relations manager for Ikea China, Ikea's current businesses in China are mainly retail, procurement, and logistics. The closure of the three offices aims to integrate its procurement-related trade section into one unit. This plan was decided in April 2009, when Ikea re-planned its structure and made a new working model. Xu said in the new unified trade area, Ikea's purchased products will be divided into 14 categories.

It is rumored that Ikea plans to lay off about 70 employees in the three offices and will cut staff in Shanghai, Guangzhou, and Qingdao. Reports say the total number of employees affected by this round of layoffs will reach 200. However, Xu denied the rumor and said the company has not decided the exact number of employees to be laid-off this time.

In addition, Ikea's employees from Shanghai and Chengdu said that the staff cut is currently limited to the procurement departments and the retail departments of Ikea's retail stores have not received such news yet.

Ikea has seven retail stores in mainland China having entered the Chinese market in 1998 with its first store in Shanghai. The company opened its newest store in Dalian, Liaoning in February 2009.

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