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IKEA founder ‘distressed’ by problems in Russia

IKEA founder, Ingvar Kamprad, is reported to be ‘distressed’ by the company's troubled expansion into Russia, according to Swedish media. The Local reports that a review of its operations in Russia has revealed major shortcomings at its shopping centre subsidiary Ikea Mos. Kamprad said: "The documented mess in our Russian shopping centre company is completely unacceptable. I have been too optimistic. It is outrageous and deplorable that our plans have gone awry along the way."

Audit work was performed by external experts in accounting and engineering, including KPMG, Ernst & Young, PriceWaterhouseCoopers, Sweco and Cowi in addition to internal investigations conducted by Ikea. The investigations uncovered serious problems at some of the shopping centres' buildings, lack of permission for operations, poor corporate governance and weaknesses in internal controls and poor personnel management. The company appointed a new CEO, Per Wendschlag, on 1 October. Wendschlag said: "We have great potential in the Russian market and are here to stay. We now need to do our homework and my focus is to build up a strong Ikea Mos from Ikea values."

Planet Retail

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