Ikea profits up 10%

 

Ikea's flat-pack furniture empire found a growing number of fans
in emerging markets last year, helping to boost profits by 10% and
offsetting tougher conditions in the UK.

The Swedish company, which has 287 stores in 26 countries after opening seven new sites, said sales grew 6.9% to 24.7 billion euro (£20.6 billion) in the year to August 31, with Russia, China and Poland leading the way.

Last month the company announced a 3% fall in sales at its 18 UK stores to £1.15 billion after it suffered in the consumer spending squeeze and a stagnant housing market.

But growth in most other countries, as well as cost reductions and lower interest payments, helped profits rise 10.3% to three billion euro (£2.5 billion) despite a slight drop in its gross margin.

It claims to have lowered prices by an average of 2.6% without sacrificing quality to help attract customers as many of its markets around the world fight economic gloom.

Ikea opened stores in China, Germany, Italy, Norway, Russia, Switzerland and the US in the year, creating 4,000 jobs.

It plans to invest three billion euro on its expansion plans this year and is also considering its first move into India.

The company has already opened sites in Australia, Russia, France, Switzerland and Spain in the current year and plans other openings in China, Japan, Finland and Italy.

It has not opened a store in the UK since Southampton in February 2009 but resubmitted a planning application in Reading last week and is looking at other sites in this country.

Group president and chief executive Mikael Ohlsson said: "Today, when nations and people face economic challenges, Ikea is more relevant than ever."

The company, founded in Sweden in the 1940s, will celebrate 25 years in the UK this year.

It said last month it had increased its share of the home furnishings market in the UK from 6.1% to 6.3% despite falling sales, as the market was among the worst hit by the consumer spending squeeze.

It pledged to invest £26.6 million this year in improving its store environment. It recently revamped a store in Wednesbury.

Strong kitchen sales - which were up 6% on a like-for-like basis - helped support the overall performance as more customers took up the kitchens service package launched in 2010.

Ikea said it lowered UK product prices by 5% across the home furnishings range compared to the previous year, and added 800 more products for customers to buy online, where sales grew by more than 25%.

PA

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory
Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

Cook not the only one to be caught in The Oval mindwarp

Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

Can Benitez get the best out of Bale?

Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

Beijing witnesses new stage in the Jess and Kat rivalry

The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

Jeremy Corbyn interview: A shrewd operator desperate for power

His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

Isis executes Palmyra antiquities chief

Robert Fisk on the defender of the ancient city's past who was killed for protecting its future