David Rosenthal: evaluation

Transcript context

…So coming out of the 90s. Coming out of the 90s. In 2000, IKEA starts their next big geographical growth initiative, which is Russia. They reach a deal with the Russian government that IKEA is going to enter Russia and they’re going to use the market, which they expect to be really big for IKEA, to also pilot the “MEGA” shopping center concept, which I think was actually the brand name of this shopping center, that they then later roll out to other places around the world. The idea is IKEA writ large has so much capital and so much resources at this point. We’ve always owned our own real estate and we think that’s a key part of securing that future. We have so much more cash resources now. What if we also invest in large retail centers around the IKEA store, which they hadn’t really done before. The idea—this is genius and not novel now because so many other folks do it—we surround the IKEA with lots of partial competitors. Because IKEA sells so much stuff in its range that yes, there could be a Home Depot there, or yes, there could be a Bed Bath & Beyond there—I’m using American terms here; obviously, these are not Russian stores—and we compete with them partially. I didn’t realize Russia is where they started the strategy.…

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