Vladislav Lalic, Director for Real Estate and Development for Southeastern Europe of IKEA company - It is not up to us

(Vladislav Lalic)

The moment it obtains all necessary permits from the state, IKEA will start the construction of the first department store in Serbia. It has been confirmed by the Swedish company that they do not give up the opening of department stores in our country – in the next ten years IKEA will invest 250million euros in five facilities which will provide job for 2.000 people.

The Swedish Company first measured a lot at the wholesale marketing Novi Beograd. After that, the construction of department stores in Novi Sad and Nis should take place and then another one in Belgrade and at the end of the investing cycle, the construction of the department store at crossroads of Kragujevac, Kraljevo and Cacak.

In the interview for eKapija, Vladislav Lalic, Real estate andDevelopment manager for Southeastern Europe is talking about ten-year plans in Serbia,beginning of the first department store construction in our country,cooperation with local companies…

eKapija: IKEA announced that it will havefive facilities in Serbia?What is the department store opening dynamics like?

- It is true that there are five facilities. IKEA has made such a strategic decision when it comes to the Serbian market. Chronologically, we are first building a department store in Belgrade, then in Novi Sad, Nis, then another department store in Belgrade.At the end, we will open a department store at the crossroads of Kragujevac,Kraljevo and Cacak and for that store we still have not found adequate location.

It is difficult to say in which period all facilities will be built because it depends on the market development, population purchasing power, and economic situation. We penetrate the market we make expansive analysis of it. All facilities in Serbia should be opened in aten-year time. It is possible we open them in shorter period of time but we will see the situation after the opening of the first store.

eKapija: The first IKEA department store should beconstructed at the wholesale market in Novi Beogad. How far did you get withthis project? When do you expect the construction works start?

- We are ready to start construction after we obtain all necessary documentation. We did our part of the jos and we have signed preliminary contract with partners. We are waiting for the local and governmentalauthorities to solve the legal issue of land conversion from the right to useto the right of ownership, then to obtain a construction permit and after thatto start building. In March, when the President of our company, Michael Ohlssonvisited Belgrade, the governmental institutions promised it would be at shortnotice.

eKapija: How many square meters will the departmentstore occupy? How many staff will it have and what will it offer to customers?

-The department store in Novi Beograd will occupy 40.000 m2 and will be in a group of larger IKEA department stores. The store will have standard product line for that size which means some 9.500 items. The investment will total some50 mil EUR and some 400 staff will directly be employed. It is important to say that, if we take a look indirectly, there will be jobs for at least 2.000-3.000people hired on services provided for the functioning of a facility of that size. We will move the construction operations in Serbia because we will hire local construction companies to carry out construction activities.

eKapija: You have also announced another facility in Beograd, in Bubanj potok. Will it be of the same type as the one at wholesalemarket?

-At this moment, we are particularly focused on a department store in Novi Beograd. The time will pass until we open the second store.

eKapija: Does IKEA have competitors at theSerbian market?

- We havecompetitors everywhere. We respect competitors because it enables us to learnfrom then and to become better. We fight in the fair manner. The Serbian markethas potential, IKEA is well-recognized here as a brend and we expect ourcompany to runs business successfully.

eKapija: The biggest world companies are alsodiscussing the economic crisis. How do you struggle with the latest challenges?

- Globally, IKEA hasbeen very successful over the past years. We are realizing a constant growth bothin turnover and in profitability. Customers all over the world change theirhabits when teh crisis appears, people spend less and we follow it and adjustour prices.

eKapija: The company in London is building housing-businesscomplex. Does IKEA plan investing in similar facilities in other cities, let’ssay, in this region?

- IKEA sometimes does something out of its core business. These kinds of plans do not exist for Serbia.

eKapija: IKEA is planning to launch a line of furniture enriched with by tvs and audio systems in cooperation with the Chinese companyTCL Multimedia? Will these products be available in department stores in Serbia?

- Yes, these kinds of products will be found in our department stores in Serbia.

eKapija: Is the product range the same inall IKEA department stores? To what extent do you accommodate the market?

- Product range accommodates to certain extent but if you openGerman, Swedish or soon Serbian catalogue, you will find the same goods. There are certain specific market differences and therefore we are changing a part of the product range. Changes are bigger in the countries which are specific. It refer to England which has certain furniture dimension and America where a bit more massive furniture is used. When we started the placement at the American market we saw that design which is in Europe does not suit them and then we adjusted our offer to that area.

Suzana Obradović