* Home working boosts office furniture sales: supply head
* Border restrictions hitting logistics flows
* IKEA's supply chain well prepared to cope
Furniture giant IKEA is producing face masks and other protective gear for hospitals, joining a growing list of companies branching out of their normal business areas to help meet equipment shortages in the fight against coronavirus.
Having started off with masks for staff in China in early stages of the pandemic, the Swedish group is working with several suppliers to ramp up output of masks for health workers, as well as hand sanitisers, visors and single-use aprons.
The first batches for European healthcare facilities are in transit, Henrik Elm, global supply manager at brand owner Inter IKEA Group, which is in charge of supply, told Reuters.
Several other companies are also working to help address an acute shortage of medical supplies, with vacuum cleaner company Dyson making ventilators, fashion group Armani producing medical overalls and spirits brand Ricard donating alcohol for sanitisers.
WORKING FROM HOME
IKEA has reopened all but one store in China, where the virus emerged, but across markets a majority of the 436 stores are temporarily closed.
Demand for office furniture is holding up as many people are working from home in the health crisis, Elm said.
‘The sales pattern is changing. One area where we are selling pretty well compared to others is office furniture. People are working from home and they have identified needs in their homes for it,’ he said in an interview.
‘So, it (demand) is distributed differently - in some areas we keep it up well, in some we have a major impact.’
Elm said supply chain disruptions had increased with the spread of the virus to Europe and America, with closed borders or restricted movement a key bottleneck.
IKEA has managed to cope, however, partly by spreading inventories to warehouses in several locations, he said.
‘So far, we have seen a limited effect on the availability of our offer,’ he said.
Elm said he expected no shortages of wood or other materials, such as plastics and textiles, as global demand for such materials was in decline.
One area of concern, however, is finding room to store goods already in transit to markets where IKEA has temporarily closed many of its stores.
‘There will be constraints in coming weeks in harbouring these goods. Warehouses will be a bottleneck,’ he said. ‘Things that were on their way we are either re-steering or storing.’
IKEA produces a tenth of products itself and sources the rest from suppliers, mostly in Asia and Europe.
As IKEA and other retailers adapt to slowing consumer demand, many suppliers and service partners are struggling.
Elm said IKEA was assisting them with loans, swift invoice payments and help accessing government support packages. (