Ingka Group, the owner of IKEA stores, will pay

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The owner of the IKEA stores, Ingka Group, has extended the period in which he will pay the approximately 12,000 employees in Russia by three months, until August, and could continue to pay the workers and after that, said his retail director in an interview, Reuters reports.

The world’s largest furniture brand announced in early March that it would temporarily close stores and cut off supplies to Russia, citing disruptions to the supply chain and difficult trade conditions due to Russia’s invasion of Ukraine.

At that time, the company said that all affected staff will be paid in rubles, at least until May.

“It simply came to our notice then. We continue to monitor, analyze, look at what is happening, and we will make decisions as we move forward, “Tolga Oncu, Ingka’s retail manager, told Reuters.

A wave of Western companies has disrupted operations in Russia over Russia’s invasion of Ukraine and sanctions against Moscow, and a growing number of companies have signaled they will leave the country indefinitely.

Some companies, including McDonalds and Renault, have said they will continue to pay Russian staff for the time being.

Russia has warned that it could nationalize foreign companies that have suspended operations in the country.

IKEA operates through a franchise system, with Ingka being Inter IKEA’s main franchisee, which is also responsible for supply, and has 2,500 employees in three factories in Russia.

Ingka, also one of the largest mall owners in the world, has so far kept its 14 malls in Russia open, under the “MEGA” brand.

Oncu refused to give details about the source of the money for the payment of local salaries.

“It simply came to our notice then. We use the assets we have (in Russia), “he said.

Oncu also declined to say whether Ingka was considering leaving Russia altogether.

Ingka has 17 stores in Russia and a distribution center. In its last fiscal year, Russia was the company’s 10th largest market, with 1.6 billion euros in retail sales, or 4% of total retail sales.

The commitment to extend the salary for another three months refers to Ingka staff and not to Inter IKEA staff, an Ingka spokesman said. Some employees have been reassigned to work with returns of goods and maintenance of stores, warehouses and systems.

Russia calls its actions in Ukraine a “special operation.