IKEA to test furniture rental in 30 markets

KAARST, Germany, April 3 (Reuters) - IKEA will expand tests to allow customers to rent desks and sofas rather than buy them as it shifts away from selling low-cost disposable furniture in response to growing environmental concerns.

The world’s biggest furniture group first said it was looking into furniture leasing in February. It fleshed out its plans on Wednesday at an event held at its first ‘sustainable’ store in Kaarst, western Germany, opened in 2017.

“Testing out opportunities for leasing offers is one of the ways we are challenging ourselves to deliver on our transformation strategy,” said Jesper Brodin, chief executive of Ingka Group, which owns most IKEA stores.

“Climate change and unsustainable consumption are among the biggest challenges we face in society.”

IKEA’s move towards supporting a more circular economy comes as many young consumers say they want to minimise their impact on the environment, preferring to rent items ranging from clothing to cars.

Its business model has already come under pressure from the rise of online retail and a growing reluctance among younger shoppers to travel to its vast out-of-town stores, get the flat-pack furniture home and assemble it themselves.

Rent the Runway, which has previously only rented out designer apparel and accessories, said last month it will partner with Williams-Sonoma Inc’s West Elm brand to allow subscribers to rent home decor.

IKEA, which had global sales of 39 billion euros ($44 billion) last year, said it wants to develop subscription-based leasing offers to encourage products to be reused as many times as possible before being recycled.

It had already committed to make all its products from renewable and recycled materials by 2030 and also to design all its products to be reused, repaired and recycled. In 2018 it handled 1 million orders for spare parts to repair products.

IKEA has already started testing different furniture rental projects in the Netherlands, Sweden, Switzerland and Poland, and aims to expand the tests to all its 30 markets next year.

In Sweden and Switzerland, it is looking into providing furniture to companies on a subscription model, while in the Netherlands it is testing a rental package for students in cooperation with a housing association.

$1 = 0.8933 euros Reporting by Emma Thomasson; Editing by Jan Harvey