Retail Giant IKEA in Talks to Open Ramallah Store

Senior representatives of the Swedish furniture chain flew to Ramallah to meet with the Palestinian economy minister, who welcomed the initiative and promised to help push it forward.

The Swedish furniture chain IKEA may be headed to Ramallah.

The company is currently looking into opening its first store in the Palestinian territories, most likely in Ramallah. Palestinian Authority officials have been in talks with representatives of IKEA's global franchising operation, Inter IKEA Systems, for the last several months. The discussions, which are still in the exploratory stage, are focused on where the store would be located as well as the sales potential for IKEA products in the PA.

Last month two senior IKEA Systems representatives visited Ramallah to explore the possibility of opening an IKEA there. Ehsan Turabaz, manager of international sales, and company director Henrik Ekman met with PA Economy Minister Jawad al-Naji, who welcomed the initiative and promised to help push it forward. Naji also spoke to his guests about plans to develop the Palestinian economy and about the local business climate.

Palestinian investors and businessmen have contacted IKEA's management a number of times over the past two years about opening a store in the PA, TheMarker has learned. However, only in recent months has IKEA shown an interest in looking into the possibility.

Sources close to the initiative interpreted the visit by senior IKEA representatives PA as a good sign, but made clear that IKEA had yet to complete its initial analysis of the project. They stressed that it is not yet clear whether IKEA will indeed open a store in the PA.

According to source in the Palestinian business community, an IKEA store could be a good fit for the local market.

"Arab society is undergoing a process whereby the large family is splitting in terms of residences into nuclear families," said the source. "Many are moving to apartments, and IKEA is definitely relevant to the Palestinian public."

The source added that many Palestinian investors were interested in acquiring a stake in a Palestinian subsidiary of the Swedish furniture giant, and that it would have no problem raising capital.

These negotiations with IKEA global are separate from the operations of IKEA Israel, which today manages two stores in Israel, one in Netanya and the other in Rishon Letzion. Both are highly successful. If the Ramallah deal goes through, IKEA Israel has offered to help train future employees of the Palestinian subsidiary at the company's new training facility in Netanya. 

Bloomberg
Yuval Tebol
Moti Milrod