More international brands, new markets and higher returns, without a corresponding increase in operating costs. That is the strategy Fourlis is seeking to implement, turning the infrastructure that currently serves IKEA, Intersport and Foot Locker into a broader retail platform on which new business activities can also be developed.
The new strategy is taking shape at a time of change in Fourlis’s shareholder base.
According to figures presented at Investors' Day, Quest Holdings holds about 13% of the group, while the Fourlis family retains a stake of around 30%. Institutional investors collectively account for almost 50% of the share capital.
Quest’s presence is a significant development for the shareholder base. However, no business partnership with the Quest group was announced in these remarks, nor was any new role for Theodoros Fessas in management mentioned.
Interest in potential synergies remains separate from the decisions Fourlis has already announced on its investment strategy.
Fourlis chairman Vasilis Fourlis confirmed at Investors' Day that the group was considering adding new brands, while making clear that expansion was not an end in itself. “We are looking at many new concepts, but we will not enter into any new partnership unless we are confident in the strength of the brand, not only in the short term but also in the long term, and in the return on investment,” he said. Chief executive Yannis Vasilakos added: “Every month, we assess a new concept that approaches us to represent it.” As he explained, the challenge is not finding opportunities but selecting those that meet the financial criteria and can be incorporated into the new operating model.
“The platform and shared capabilities we are building will enable us to grow and create a more productive organisation,” Mr Vasilakos said, linking the transformation to broader geographic coverage and an improved customer experience.
The business plan envisages average annual sales growth of 7.5% through 2029, an EBIT margin of 5.6% and operating profit of €45m. Operating profit is expected to grow at an average annual rate of about 18%, excluding the one-off cost of the 2026 transformation. The ultimate target is sales of €800m in 2029.
Why it says no even to investments offering a 12% return
The new strategy comes with stricter capital allocation. Mr Vasilakos explained that every investment, whether in a new store or a digital project, must clear specific return thresholds. “We have specific investment criteria. If an investment does not meet them, we will not make it,” he said. He added that the group had recently rejected a potential investment in an IKEA store, even though its projected return was close to 12%.
The characteristics of the three chains also explain the group’s development priorities. An IKEA store of 2,000 sq m requires invested capital of €1.7m and is expected to deliver a 15% return once mature. An Intersport store of 700 sq m requires an estimated investment of €600,000, with a return of 16%-18%. Foot Locker offers the highest projected returns, at 20%-25%, with an investment of €500,000 for a 350 sq m store.
A significant part of the strategy involves investments that are not immediately visible to consumers but can have a decisive effect on profitability. The new e-commerce platform, with a budget of €3m, is expected to deliver a return of at least 20%, according to management estimates. An automation investment of €500,000 is likewise estimated to generate a return of about 26.5%.
At the same time, the development of logistics infrastructure creates opportunities to expand beyond existing markets. Responding to an investor’s question, Mr Vasilakos said the distribution centre linked to Inter IKEA would have about 15% spare capacity once the planned volumes were fully utilised. “We believe this capacity is sufficient to add one more country,” he said, clarifying that such a move would depend on decisions by Inter IKEA. Egypt was mentioned as a possibility, but no announcement has been made.
The bet beyond 2029
Fourlis management, with Quest Holdings holding a 13% stake and the Fourlis family 30%, believes that the full financial returns on the investments will be seen mainly after 2029, when new stores have matured and the technology infrastructure has completed its initial development phase.
“Once the digital projects have matured, we expect a further improvement in the EBIT margin of 0.5 to 1 percentage point,” Mr Vasilakos said. In a hypothetical scenario in which the existing model reaches full maturity, the EBIT margin could rise to 7.5%-8%, compared with the official 2029 target of 5.6%. This improvement could be accompanied by a reduction in annual investment to about €25m, excluding one-off projects, and greater free cash flow generation. Mr Vasilakos linked this prospect to shareholder returns. “If that happens, we will return significant sums to our shareholders,” he said.