Matthew Bronfman has bought Canada's Gnat family's 25% of IKEA Israel, at a company value of NIS 219 million, the same value at which he bought Co-Op Blue Square Consumer Cooperative Society's 75% stake. IKEA Israel is holding a ceremony today marking the change in ownership from Co-Op to Bronfman. Inter Ikea Systems managing director Hans Skalin will attend.
Bronfman said IKEA Israel would build a second store south of Tel Aviv, between Ashdod and Ben Gurion Airport. IKEA Israel is required to open a second store by September 2008, but Bronfman believes that it will be ready by the end of 2006. He said that projections given to him state that the second store would boost IKEA Israel's sales by 50%. IKEA Israel's sales turnover is estimated at NIS 350 million a year.
Bronfman said IKEA Israel's 2005 target was a 5% growth in sales. However, on the basis of January-May figures, he believes that the store will beat this target. He said projected sales growth until the opening of the second store was 5-10% a year.
IKEA launched operations in Israel in April 2001, with a 23,000-sq.m. store at the Poleg Interchange at Netanya.
Commenting on the acquisition of full ownership of IKEA Israel, Bronfman said, "Most of you know about the acquisition of 75% of IKEA Israel's shares. Today we are completing the acquisition of the outstanding holding. My family and I will own 100% of Blue Square Israel Furniture Ltd., which owns the IKEA franchise in Israel."
Bronfman did not rule out buying IKEA franchises in other countries. Commenting on IKEA Israel's original business model, which included selling on Saturdays, he said, "IKEA Israel will absolutely not be open on Saturday. When we bought Blue Square Israel Ltd. (NYSE:BSI; TASE:BSI), we declared that the chain would not open on Saturday. Besides, we'll open a Glatt Kosher restaurant at IKEA Israel."
Commenting on the company's expansion plan in Israel, Bronfman said he planned to open a second IKEA store as soon as possible. "If there's a possibility of opening a third store, we'll do it, on the basis of market need."
Published by Globes [online], Israel business news - www.globes.co.il - on June 1, 2005