Ikea will try renting furniture to prolong product lifespan

  • Ikea will start leasing furniture as it moves to develop "scalable subscription services" to prolong the life of its products, the Financial Times reports.
  • Customers will be able to return their furniture at the end of the leasing period and, if they want to, pick something new.
  • The first leasing trial will start in Switzerland as early as this month.
An employee walks in a store of the Swedish furniture giant Ikea in Madrid on October 10, 2018.
Gabriel Bouys | AFP | Getty Images
An employee walks in a store of the Swedish furniture giant Ikea in Madrid on October 10, 2018.

Ikea will start leasing furniture as it moves to develop "scalable subscription services" to prolong the life of its products, the Financial Times reported.

Torbjorn Loof, chief executive of Inter Ikea, which owns the Ikea brand, told the FT customers will be able to return their furniture at the end of the leasing period and, if they want to, pick something new.

"And instead of throwing those away, we refurbish them a little and we could sell them, prolonging the lifecycle of the products," Loof said. He added, the leasing trial is part of Ikea's move to develop a circular business model that reuses products to make new ones.

"You could say leasing is another way of financing a kitchen," Loof said. "When this circular model is up and running, we have a much bigger interest in not just selling a product but seeing what happens with it and that the consumer takes care of it."

The Swedish furniture retailer is opening smaller stores in downtown areas and working to improve customers' delivery and online sales experiences. Ikea plans to open its first smaller, "city center" store in Manhattan this spring.

An Ikea spokesperson told CNBC via email that the company is working on new business models as it looks to reduce its impact on the environment.

"In certain markets, such as Switzerland, we're exploring and testing potential solutions, designing relevant offers and then test them with customers," the spokesperson said.

Ikea is also considering a spare parts business for consumers to replace parts like screws for furniture that are no longer in stock.

The first leasing trial will start in Switzerland as early as this month, the FT reports.

Read the full story in the Financial Times.

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