IKEA Israel Plans to Launch On-line Store

IKEA Israel is upgrading its Web site and uploading its catalog in preparation for opening an on-line store. No target date for launching the virtual store has been set.

"The main consideration for opening the on-line store is to make it accessible to those who are geographically remote, and thus expose the store and its products to a wider audience of customers," explained Liora Arman Romano, the chain's marketing director in Israel.

Romano noted that IKEA has on-line stores in many countries, as well as telephone call centers for processing orders.

IKEA Israel currently operates just one branch - in the south Netanya industrial zone. Two additional branches were scheduled to open this year, but these plans were delayed due to uncertainty over ownership issues.

The local IKEA operation is owned (75 percent) by Co-Op Blue Square Consumer Cooperative Society (Co-op), which has been directed by the courts to sell all of its holdings. But IKEA international and the Co-op have failed to agree on the terms of the sale.

The other owner (25 percent), Canadian businessman Albert Gnat, died two weeks ago, further complicating the ownership situation. (IKEA international sold Gnat this stake in 2001, but retains the right of first refusal for its sale.)

IKEA's revenues is 2003 totaled NIS 323 million, up about 6 percent from the previous year. Operational profit shot up 20 percent, to NIS 50 million last year, but net profit fell by NIS 5 million to NIS 28 million.

More than 6 million shoppers have visited IKEA Israel since the store opened its doors in Netanya in 2001.