Bronfman Sells 10% of Ikea to Three Execs

Matthew Bronfman may have bought Ikea Israel, but he is not going to remain the sole owner. Haaretz has learned that the Canadian millionaire sold 10 percent of the company's shares to three of Ikea Israel's executives according to a company value of $52 million.

Ikea Israel chief financial officer Dani Bruchman, logistics and operations manager Elisha Cohen, and CEO Shlomi Gabay each own 3.3 percent, leaving Bronfman with the other 90 percent.

Bronfman had bought out the Blue Square Co-Op's 75-percent stake in Ikea Israel, and the other 25 percent from the heirs of Albert Gnat, a Canadian businessman.

Gabay, Bruchman and Cohen were part of the team that set up Ikea Israel. Insofar as could be ascertained, the global Ikea group supported the stock transaction as part of its deal with Bronfman. It may have even made the sale contingent on it.

Ikea Israel has become one of the most successful retail companies in Israel. In 2004 it achieved a net profit of NIS 35 million, up 25 percent from 2003, when it netted NIS 28 million. Sales reached NIS 345 million, from NIS 325 million in 2003, an increase of 10 percent. Its gross margin is considered remarkably high for a retail chain.

Its figures are all the more impressive given that Ikea Israel operates from a single outlet, a giant store by the Poleg intersection near Netanya.

A Bronfman group spokesman said, "The group management decided to accept the recommendation of the global Ikea and allocate 10 percent of Ikea Israel's shares to three top executives. The three received preferential purchase terms."