May 24, 2017
IKEA Group picks company insider as next CEO in fast-changing market
, Reuters
STOCKHOLM - IKEA Group has promoted company veteran Jesper Brodin to take over as chief executive as it steps up efforts to integrate its furniture stores and online business.
Brodin, 48, has worked at IKEA for 22 years and is currently head of range and supply chain development. He will become CEO in September after his predecessor Peter Agnefjall, 46, said he was resigning after four years in the top job.
Consultancy Kantar Retail's Simon Johnstone said Brodin, who is Swedish, was a good choice given his immersion in the culture of the company.
"His challenge will be making IKEA more accessible to more people, while accommodating how people want to shop," he said.
The web of companies that make up IKEA has recently focused ownership of retail operations, which also include shopping centers and food retail, on IKEA Group. Supply chain management and design has transferred to brand owner and franchisor Inter IKEA.
Hopes are that with IKEA Group focusing fully on retail, it will be better placed to defend its market-leading position and maintain growth as competition and consumer expectations evolve.
While sticking to its strategy to keep prices low with large out-of-town stores and self-assembly of products, IKEA is testing new store formats such as smaller downtown stores and pickup-points, as well as rolling out online.
Agnefjall, another Swede who became CEO in 2013, said that after his two decades at the group he felt it was a natural time to do something else but that he would start by taking a break.
"Peter Agnefjall had a clear directive to expand into new markets, whilst continuing to deliver strong financial results. In that respect it is mission accomplished for Agnefjall," said Kantar Retail's Johnstone.
Lars-Johan Jarnheimer, chairman of parent company INGKA Holding, told Reuters that Brodin would need to focus hard on integrating stores, new store concepts and e-commerce services.
IKEA Group plans to have e-commerce in nearly all its markets by year-end and expects online sales to keep roughly doubling every two years.
