IKEA to restructure U.K. operations

IKEA, the world's largest home-furniture retailer, said it will overhaul its U.K. operations in a restructuring that affects about 1,200 workers and responds to a "challenging" market as well as increasing competition.

IKEA will streamline management at the division, saying "the way in which we operate our units is not meeting the needs of our customers, nor is it always a lean, simple and quick way of working," according to an e-mailed statement Monday.

The company, which is based in Delft, the Netherlands, said the changes will lead to some job cuts and that negotiations with the affected workers will start today. Some of the targeted workers may be offered new jobs within or outside IKEA, said Nicki Craddock, a spokeswoman for IKEA in the U.K.

The U.K. is IKEA's third-largest market, accounting for 9 percent of revenue, after Germany and the United States, which account for 17 percent and 12 percent, respectively, according to IKEA's Web site.

IKEA entered the U.K. two decades ago and now has 15 stores in the country, with four outlets in London. Other locations include Birmingham, Edinburgh and Nottingham.

IKEA said the U.K. home furnishing market has experienced a "couple of challenging years," a trend that's set to continue. Competition from food retailers and global brands is also increasing, it said. The overhaul will make IKEA "more productive, efficient, and flexible," and will take place at all U.K. stores, the company said.

The Swedish company aims to complete the measures by the beginning of next year.

IKEA, which opened its Draper store in May, was founded in Sweden by Ingvar Kamprad, the world's fourth-richest person, according to Forbes Inc. The company had 237 stores at the end of last year, when it generated sales of 17.7 billion euros ($23 billion), according to its Web site.