IKEA Retailer to Invest US$1 Billion Ahead of EU Textile Fee Laws

Ingka Group, the largest global IKEA retailer, has announced a €1 billion (US$1.03 billion) investment to bolster recycling capabilities for textiles, mattresses, and other materials, aligning with the European Union's push for circular economy practices. In Mexico, IKEA's local operator, Ikano Retail, reported robust growth and unveiled its largest store in the country.

Ingka Group’s investment arm, Ingka Investments, has allocated €667 million for new investments in recycling companies, with a primary focus on textiles. The remaining funds will support existing investments, including RetourMatras, a mattress recycler company, and Morssinkhof Rymoplast, a plastics recycler.

“We aim to recycle as many mattresses, plastics, and textiles as IKEA sells by 2030,” said Peter van der Poel, Managing Director, Ingka Investments, in a press release. The initiative aligns with upcoming EU legislation that may require retailers to pay fees for every textile or clothing item sold, funding sorting and recycling efforts.

“We feel it is so needed to create scale and volume, not only for IKEA's needs but also for market needs going beyond that”, van der Poel added.

Ikano Retail, which operates IKEA stores in Mexico and Southeast Asia, reported fiscal 2023 revenues of $1.1 billion (MX$23.03 billion), reflecting a 1.3% year-over-year increase. In Mexico, revenues reached MX$2.24 billion, a 20.8% rise driven by a strong peso and competitive pricing.

In November 2024, IKEA opened its largest store in Mexico, the Guadalajara Expo, spanning 37,000 square meters and offering 8,400 products. Located on López Mateos Avenue, the store employs 300 people and features a 730-seat restaurant. Jalisco has shown the highest growth in Mexico, according to Ikano Retail Mexico Director Jaap Doornbos. 

IKEA now serves all 32 Mexican states through its e-commerce platform, which grew by 42% last year and is projected to expand by 24% in 2025.