IKEA experiences the toughest times but has to return subsidies it received from eight European countries and the US at the height of the coronavirus crisis. The furniture giant’s financial situation has not suffered as much as first expected.
IKEA bosses say that no one knows how things will continue to develop. In its efforts to keep the sales stable, Ingka Group, which manages most of Ikea’s retail operations, now has to have a better understanding of the impact of the crisis on business. Only after thorough analysis, the flat-pack giant will decide on how much to pay it back as it is the right thing to do.
Tolga Oncu, Ingka’s retail operations manager, says that IKEA received subsidies from Belgium, Croatia, the Czech Republic, Ireland, Portugal, Romania, Serbia, Spain and the United States. However, the sums disclosed so far.
“Ikea is in touch with governments in nine countries (…) about repaying the government aid we received to cover coworker salaries during the height of the pandemic,” Ingka Group spokesman said.
Several of the countries have already been reimbursed, Ingka said, without specifying which ones nor the sums involved.
IKEA received government’s aid amid coronacrisis
Ikea said it would not disclose the overall sum it received from as the government aid to cope with coronacrisis. In a statement, Oncu said Ikea had accepted the money at the height of the epidemic to secure livelihoods and employment.”
Ingka had initially expected “business demand would fall by 70 to 80 percent,” Oncu said. But as stores have reopened, “we are experiencing larger than anticipated demand on home improvement items.”
“Only 10 percent of the business has been lost and this was with US, UK and Russia yet to re-open stores,” Ingka said.
In January, Ikea announced the closure of all of its 30 stores in China “until further notice” because of the spread of the new virus. In March 2020, some 300 of its 380 stores were closed around the globe. Most of them have since reopened, and only 16 remain closed.