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New IKEA CEO says to speed new store opening, no numeric target

New IKEA CEO says to speed new store opening, no numeric target

By Anna Ringstrom

STOCKHOLM (Reuters) - The new head of IKEA Group, the world's biggest furniture retailer, said on Monday he would accelerate the pace of store expansion but would drop a numeric target for new outlets.

IKEA Group veteran Peter Agnefjall, who became chief executive on Sunday, stood by the target announced a year ago to double sales to around 50 billion euros by 2020.

He told Reuters he expected to achieve that through around 5 percent annual sales growth in existing stores, and another 5 percent through new store openings, saying he preferred the sales growth target to a focus on the number of stores.

As the group unveiled the appointment of Agnefjall one year ago, his predecessor Mikael Ohlsson announced plans to increase pace of rolling-out outlets to 20 to 25 annually after holding back on store expansion.

"That's not a particularly good measurement. A large store can turn around five times as much as a small store, and therefore it's not a relevant figure to talk about," the new chief said.

"That's why we want to drop it that as a yardstick. It is not the primary one," he said on the store opening target.

He however agreed with Ohlsson's remark a year ago that the roll-out pace would pick up. In 2010/2011, IKEA Group opened seven stores and in 2011/12, 11 stores.

Agnefjall, most recently its boss in Sweden, said IKEA Group had 10-15 new stores in the pipeline for 2013/14 after it opened only five in the fiscal year that ended August 31, three of which were in China. This year, too, he said, another three stores will open in China, a market IKEA hopes will become one of its biggest.

IKEA Group, which owns most of its stores worldwide while some are controlled by external franchisers, more than doubled sales in the last 10 years to 27.6 billion euros in 2011/12.

Agnefjall said that in the fiscal year just ended, turnover varied widely between markets with performance in China and Russia particularly strong.

Performance in North America was also very good, he said, while in southern Europe it was sluggish, and in the rest of Europe, somewhere in-between.

The group on average lowered prices by about 1 percent in the year, and planned to cut them by as much this year, he said.

The group is due to publish its full-year results early next year.

($1 = 0.7582 euros)

(Reporting by Anna Ringstrom; editing by David Evans)