IKEA Cyprus to open in September

The budget furniture store IKEA will open its first outlet in Cyprus on September 5 within the busiest commercial square mile on the outskirts of Nicosia, where other store openings are expected the same month in what is probably going to be the biggest shopping mall on the island.

Vassilis Fourlis, president of the operator of the furniture franchise that already has two IKEA stores in Greece, will be in Cyprus for the inauguration of the 22,000 sq.m. store strategically located within the ‘Mall of Cyprus’ at the Shacolas Emporium Park that will include retail stores, clothing shops and food outlets.

Fourlis will also be here next week for a media event and to introduce the IKEA catalogue that will be distributed in the wider market.

Although IKEA products can no longer be placed in the ‘low cost’ category, they are known for their functionality, simple designs and affordable prices.

The Fourlis group officially announced in October 2005 that it was to build the first IKEA store in Cyprus, through its House Market subsidiary. It was initially expected to commence operations by June this year, but has been recruiting local staff for training since last year.

Fourlis’ flagship store with a floor space of 20,000 sq.m. opened in Thessaloniki, followed by a second 25,000 sq.m. IKEA store near Athens airport last year. A second Athens outlet is expected to open in September and the Group also plans to open a new IKEA outlet in Bulgaria in 2008.

The cost of establishing the Cyprus and Athens stores is estimated at EUR 40 mln, while the annual turnover of House Market following the full operation of all three stores is expected to top EUR 300 mln.

IKEA Cyprus is expected to generate annual sales of EUR 40-50 mln, Vassilis Fourlis told Reuters in an interview last October 2006, while the sale of a 20% stake in Kotsovolos to Dixons Group is estimated at contribute EUR 32 mln to Fourlis Group earnings.

The IKEA opening is regarded as a welcome move in Cyprus, after the IKEA-owned Habitat franchise in Nicosia closed unceremoniously last December due to troubles at the Greek franchise operations.

At the time of closure a Habitat statement read: “It is with deepest regret that we confirm Habitat’s franchise partner Franco Import has come into financial difficulties leading to the closure of four stores – three in Athens and one in Cyprus – on December 11. This situation has been triggered by an external supplier to Franco Import, not by Habitat.”

The statement went on to say that Franco Import and Habitat UK Limited have been partners for almost ten years and that the company was, “saddened that Franco is facing challenging circumstances.”

Though the companies are owned by the same conglomerate, the opening of two IKEA superstores in Athens and Thessaloniki is said to have hit Habitat hard in Greece, with an Athenian newspaper reporting that it was only a matter of time before Habitat got into trouble.

Habitat is owned by the Ikano Group and operates as an independent commercial legal entity from the IKEA Group.

The Habitat store in Nicosia reopened its doors to the public briefly in March in an attempt to get rid of its outstanding stock and satisfy previous orders.

The store has since been taken over by the TAG Designer clothing company that already operates a store on Zena Gunther road.

 

— Public.gr to open books, music store

 

The ‘Mall of Cyprus’ in the Shacolas Emporium Park will also include a Carrefour supermarket, food outlets (Burger King, McDonald’s), a Starbucks coffee shop, and retail stores from the Shacolas groups (Debenhams, Next, Zako, etc.).

The main ‘Mall of Cyprus’ will have total shop space of 27,500 sq.m., the new IKEA store and two adjacent retail buildings with a further 10,000 sq.m. In addition, the nearby DIY Home Centre will continue to operate independently, but will eventually be engulfed by the new complex.

One of the newcomers is Public, the books, music, games and peripherals store that already operates three outlets in Greece and plans to open the Nicosia store by the end of the year.

The 1,900 sq.m. store will include sections or departments for books, music, sound and vision CDs and DVDs, computers, mobile phones, photography and gaming.

The holding company, PublicWorld AE, has already embarked on an ambitious recruitment drive to hire as many as 180 staff for all levels of work, from mid-management department heads, to marketing and sales, as well as engineers, cashiers and store keepers.

Public also attracts customers through its marketing gimmicks such as ‘in-store’ events, music downloading and surfing the Internet.