Home Retail After Karnataka and Telangana, Ikea inks pact with Maharashtra to open stores

    After Karnataka and Telangana, Ikea inks pact with Maharashtra to open stores

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    Maharashtra  Chief Minister Devendra Fadnavis told the legislature in a statement that Swedish furniture retailer Ikea AB’s Indian subsidiary has inked a pact with the Maharashtra government to invest Rs 600 crore for setting up 2-3 outlets in the state.

    Around 1,000 jobs will be created per outlet, he said.

    Founded in 1943, Ikea, the world’s largest furniture retailer, has plans to set up 25 stores in India over the next decade in cities such as Mumbai, Delhi, Hyderabad and Bangalore.

    Earlier in September last year Ikea signed an agreement with the Indian states of Karnataka and Telangana stating details of its prerequisites in terms of infrastructure.

    The Telangana state government informed the media that Ikea had decided to open its first store in India in the state’s capital of Hyderabad. “The decision by Ikea to set up its first store in Hyderabad will place Hyderabad on the international map of Ikea stores. Ikea retail outlets have a standard design and each location entails an investment of $100 million. In addition, the backward integration of supplier linkages will have tremendous economic impact to the state,” stated the government press release cited by PTI.

    Ikea India received FIPB nod to invest Rs 10,500 crore. Typically, Ikea operates large format stores located on expressways close to large cities, where it sells various household goods such as flat pack furniture, furnishings etc at relatively lower prices. The company is expected to set up its first store in Bangalore or Hyderabad within the next couple of years. Speaking at the sidelines of India Retail forum in September Ikea India chief executive Juvencio Maeztu said, “For now, the priority is the right location and we are focusing on all major metros, the right location and the good price of land, which is important for us to start right.” The company would require very large space as each store will be set up in an area measuring 3,50,000 square feet, he said, adding that it has not yet singled out any city for setting up its first store. Ikea plans to tie up with local suppliers for raw material for its forthcoming stores in the country, Maeztu said.