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. Last Updated: 07/27/2016

Stockmann Teams Up With IKEA

Finland's Stockmann Group, which has been operating on the Russian market as Kalinka Stockmann since 1989, has signed a lease with IKEA to open a department store in IKEA's Mega Mall in the southern suburb of Tyoply Stan and another one in the northern suburb of Khimki.

Jussi Kuutsa, director of international operations at Stockmann, said the retailer will invest 20 million euros in each store. The Tyoply Stan location is to be opened in spring 2004 and Khimki in fall of the same year, he said.

The retailer manages an up-scale department store in Smolensky Passazh and plans to open another 8,000-square-meter store on St. Petersburg's Nevsky Prospekt in 2005.

It also already operates a Zara clothing store in Mega Mall.

Stockmann's sales in Russia reached 70 million euros in 2002.

Michel Pascalis, managing director for Central and Eastern Europe for Jones Lang LaSalle and president of the Russian Council of Shopping Centers, said the Mega version of Stockmann would be quite different from the one at Smolensky Passazh.

Like the whole mall, it will be geared toward the middle class -- rather than clients with higher incomes -- and the selection will be considerably smaller.

Stockmann will occupy 10,000 square meters on two floors in Mega Mall -- which is more space than the retailer occupies in Smolensky Passazh, where it takes up four floors, Pascalis said.

Irina Vannekova, an assistant to IKEA Russia's general director, said Stockmann has decided to build malls next to every IKEA location. The size and theme of the malls will depend the region where it is built.

The TsUM department store had planned to use the space Stockmann will occupy, and in September, TsUM general director Lev Khasis initialed an agreement with Peter Odlund, the head of Mega projects in Russia. TsUM was to invest $10 million and open a 10,000-square-meter store this year. But by October, Khasis had sold his controlling stake in TsUM to luxury retailer Mercury and plans changed.

"Unfortunately, the level of the Mega complex and the goods sold there is too low to make it possible for us to open a store there," said a Mercury representative, who asked to remain anonymous. "The new strategy of TsUM is to work with high-end brands."