12:02pm Wednesday 8th July 2009
WORKERS at the giant new Ikea store in Southampton are today concerned for their future after the billionaire founder of the company warned of job losses.
The Swedish flat-pack furniture retailer, which opened in Southampton to great fanfare in February, recently shed 5,000 jobs as a result of the recession.
But Ingvar Kamprad, who founded Ikea in 1943 and still advises the company, says that is not enough to bring the company into line with declining sales.
“We need to decrease the number of staff further, particularly within manufacturing and logistics,” Kamprad told Swedish media. “It’s both about adjusting to sales being a lot less than budgeted, and about becoming more efficient.”
Kamprad, who has a personal fortune estimated at £22 billion, revealed sales at Ikea, which is owned by a charitable foundation he heads, are currently running around 7 per cent below target.
IKEA’S traditional programme of around 20 store openings a year may also be a victim.
“The forecast is that our margins and profits are decreasing substantially this year,” he said. “This is proof that we have been too negligent in how we take care of our existing stores. Actually, I have long tried to warn about our excessive focus on expansion, and now the board has also decided to hit the brakes.”
The West Quay Road IKEA Store, which cost £80m to build, employs 500 people.
An IKEA spokesperson declined to discuss the implications for individual stores.
She said: “Ingvar has been talking about the IKEA business from a global perspective. The UK was among one of the first economies to feel the affect of the global downturn and recently IKEA UK has taken steps to adjust to tougher trading conditions.
“All parts of the IKEA UK business continue to look at ways to become more efficient and at the same time attract more customers.”
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