IKEA acquired the American Logistics Technology firm Locus, the two companies said on Tuesday, an agreement that the Swedish furniture retailer said that they would make their deliveries to the buyers were more fluid and fast as it invests to expand online sales.
The acquisition adds to an impulse of 2.2 billion dollars by Ingka Group, the largest Ikea world franchisee, in the United States, where it competes with Wayfair and Walmart and is also dealing with higher tariffs on imports that are increasing their costs.
Ikea refused to reveal the value of the agreement. Locus was valued at 300 million dollars in its most recent financing round in 2021, according to reports at that time.
Ikea said that the acquisition of Locus would simplify his logistics and reduce his delivery expenses in an estimated 117.41 million dollars a year worldwide.
Locus uses artificial intelligence to group orders and predict routes that minimize the time that distribution vehicles pass in traffic, a planning process that IKEA workers currently perform manually, told Reuters Parag Parekh, digital director of Ingka Group, in an interview.
Locus will also allow Ikea to offer customers more windows and delivery options, and provide live updates on where their package is, in addition to delivering faster, added Parekh. It is likely to try technology in the US and the United Kingdom before using it worldwide.
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IKEA Buy the American Locus logistics technology company in an online growth impulse
“Speed is an aspect, but the most important thing for us will be flexibility, it will be the ability to track … and what is more important, through all this, help boost a better customer experience,” he said.
Locus shareholders included the Singapore GIC Sovereign Fund and private capital firms Alpha Wave, Tiger Global and Qualcomm Ventures before the acquisition of all shares by Ingka Investments, the retail investment arm.
According to the agreement, Locus will operate independently and continue working with clients beyond IKEA.
Known mainly for its large bright blue suburban stores that exhibit sofas, beds and shelves in a labyrinthine design, Ikea has changed its focus towards its online business in the last five years and invested in smaller stores in the center of the city, since it is aimed at younger and urban buyers.
Online sales represented 28% of IKEA’s total retail sales in its fiscal year 2024, compared to 11% in 2019.
The acquisition occurs only one week after Ingka Investments bought a building in Manhattan for 213 million dollars, promoting expansion in the United States despite the fact that President Donald Trump imposed higher tariffs on furniture imports.
“In terms of the macroeconomics that surrounds us … there is probably uncertainty in the next quarters,” said Parekh. “But as a company we are still committed to the United States.”
With Reuters information.
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