IKEA in talks to repay government corona support

IKEA in talks to repay government corona support
© Ikea

The Swedish home furnishings giant IKEA is reported to be involved in talks with several national governments, including Belgium, to repay money received as part of support for businesses during the coronavirus pandemic.

According to the Financial Times, the company has started talks with nine countries – Belgium, Croatia, Czech Republic, Ireland, Portugal, Romania, Serbia, Spain and the US – about repayment of government money made available to help companies in time of lockdown.

As far as IKEA is concerned, the predictions of economic damage caused by the pandemic were over-estimated.

According to retail operations manager Tolga Oncu, the damage suffered by the company because of the pandemic was less serious than initially expected.

IKEA’s initial projections were that the crisis would see the company’s takings drop by 70-80%. Now that 374 shops in the countries concerned have reopened – 23 remain closed – it appears that the business though to have been lost was merely delayed.

IKEA customers remain remarkably faithful, in other words. And they were prepared to wait until the chain opened again, to spend their money as originally intended.

We now know more than we did in February and March,” Oncu told the FT. “Therefore, now is the time to thank the governments for their support that enabled us to bridge that difficult period, as well as to talk to those governments about how we can return that support. Now that the fog is beginning to lift, we see that the crisis was not as deep and long-lasting as we initially thought.”

In Belgium, that support mainly took the form of temporary unemployment, where companies were able to lay off staff temporarily while stores were closed. Workers were then paid by the government at around 70% of their normal basic salary.

And while IKEA seeks a way to repay governments for their help, the question of compensating employees for the losses they sustained during lockdown has not been raised.

Alan Hope
The Brussels Times

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