Monday 15 June 2020 2:57 pm

Ikea to repay furlough wages

Ikea has announced its plan to repay salaries issued by international governments under furlough schemes, as the furniture giant’s stores start to reopen around the world.

The Swedish-based retailer is set to repay nine governments, including the US, Ireland and Spain, as it said it feels “hopeful” about trade returning to pre-coronavirus levels.

Read more: High street footfall jumps 50 per cent as shops reopen for business

Although Ikea furloughed 10,000 staff in the UK, its furlough repayment will not include Britain, as the company did not claim back salaries from the government. 

Tolga Oncu, retail operations manager at Ingka Group, Ikea’s main retailer, said the company had opened discussions to repay furlough money with Belgium, Croatia, the Czech Republic, Ireland, Portugal, Romania, Serbia, Spain and the US.

He added that although Ikea had initially predicted business to fall between 70 and 80 per cent as a result of the crisis, the furniture firm is now in a strong position after around a quarter of its stores reopened this weekend.

“Now we know more than what we did in February and March, it’s just the right thing to go back and say, ‘hey guys thanks very much, you helped us through this difficult period and so now can we see about paying this back or forward’,” he told the Financial Times.

Ikea said in a statement: “Although no one knows how things will continue to develop, or what the impact on our business or the economy will be, we are feeling more hopeful and clearer about the decisions we need to take for the future.”

The flat-pack retailer is one of many firms returning furlough money, including Games Workshop and the Spectator, though few large multinational companies have committed to returning all government support.

Games Workshop, the producer of Warhammer, on Friday said it would aim to repay furlough money after sales recovered ahead of expectations. Earlier this month, the Spectator magazine also announced it would repay furlough money to the taxpayer after sales growth “accelerated” during the pandemic. 

It comes after the Treasury this week announced that almost 9m workers in the UK have been furloughed due to the coronavirus, at a cost of £19.6bn.

Read more: Shops reopen to long queues as social distancing measures come into force

Ikea was one of the first large-scale retailers to resume in-store trading in 19 of its UK sites at the beginning of June. Ikea stores in Warrington and Wembley had queues of more than 1,000 people snaking round car parks.

The company has also set up a €26m (£23.3m) fund for Ikea managers to distribute to their local communities.

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