IKEA opens new store in Russia
IKEA has opened its 19th store in Russia, a 290,000-square-foot location in Novosibirsk. The store is the company’s first location west of Ural Mountains in Russia, according to the Moscow Times.
The project, which includes room for a large shopping complex with other retail locations, cost about $250 million, with a $150 million contribution from IKEA and remaining funds invested by tenants in the shopping center.
The store includes about 131,000 square feet of shopping area with room for around 170 separate companies, according to the newspaper. The grand opening of the IKEA store was held up for 20 days due to issues with local politicians over obtaining operating permits.
Swedish retailer IKEA operates 267 stores in 36 countries.
Philips to acquire lighting fixtures maker Genlyte
Royal Philips Electronics, one of the world’s largest manufacturers of light bulbs, will acquire lighting fixtures maker Genlyte Group in a $2.7 billion deal. According to Bloomberg, this is Philips’ largest acquisition ever in terms of cost.
Genlyte Group, based in Louisville, Ky., makes fixtures under numerous brand names including Alkco, Lite-Energy, Nessen and Morlite. The deal is expected to help increase the energy-saving selection offered by Philips, as well as to help the manufacturer expand further in the United States.
“This deal deepens our contacts to end users, helping us speed up the market rollout of more energy-efficient lighting and the introduction of new lighting technologies, like solid state lighting,” said Philips CEO Theo van Deursen.
Amsterdam-based Philips said it expects the transaction to close in the first quarter of 2008. Genlyte will be integrated into the luminaries business of Philips’ lighting division.
Philips lighting division accounts for about 20 percent of the company’s annual sales, which were $40.1 billion in 2006.
Coast-to-coast LBM trend watch
LBM dealers are facing challenging markets and making major decisions from one end of the country to the other. But the details and the markets vary tremendously depending on geography and local market conditions. In the following examples, we discuss some regional microtrends affecting how pro dealers are going after business.
• Midwest: Homeowners are pulling back from discretionary remodeling projects, and retailers are feeling the pinch in the kitchen and bath departments. But most people won’t put off replacing their roofs. A 2006 survey of U.S. households by the Home Improvement Research Institute found purchasing declines in 10 out of 14 building material categories. But spending on roofing products remained unchanged.
• Northeast: Although northeastern builders were among the early adopters of I-joists, home builders in New York, New Jersey and other East Coast cities were not as quick to adopt laminated veneer lumber (LVL) beams and other engineered wood products (EWP) in place of dimensional lumber. But as these builders find themselves working on more multi-family projects — dictated by both the economy and the availability of open land — many are finding EWP to be a good choice.
• Northwest: Manufacturers of insulation, moisture barriers and anti-mold products are learning how to work in tandem, often in public-private groups like the Partnership for Advancing Technology in Housing (PATH), an organization that includes, along with home builders and government agencies, representatives from DuPont, Andersen Windows, Armstrong World Industries, CertainTeed, Arxx Building Products, Louisiana-Pacific, Advanced Wall Systems and General Electric.
• Southwest: KB Home offers “TechShield,” a radiant barrier made by Louisiana-Pacific (LP), to homeowners throughout the Sunbelt states. In 2007, nearly one in two home buyers in those markets chose that option, according to the Los Angeles home builder. In some markets the acceptance rate was more than 80 percent.
• Southeast: One of the aftereffects of Hurricane Katrina has been a rush of new building codes in southern Louisiana and Mississippi. Among other mandates, cities and counties are requiring that new housing built in “velocity zones” can withstand high winds. But Gulf Coast home builders need only look east, to the state of Florida, where local authorities have laid down some of the most stringent hurricane-related codes.