Ikea profits up 10%
Friday 20 January 2012
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%.
- 1 'Cheeky' Nando's under fire for apparently coming onto a customer on Twitter
- 2 Saudi Arabia mosque bombing: Two volunteer security guards hailed as heroes for stopping Isis suicide bomber reaching worshippers
- 3 Playboy model April Summers speaks out about being a victim of revenge porn
- 4 There is something wrong but very right about this Bible illustration
- 5 iPhone 'effective power' text: how to be safe from iOS bug that lets people crash your phone
EU referendum: David Cameron's rules are a 'democratic disgrace', says French-born Scottish politician set to be denied a vote
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
A nation of inequality: How the UK is failing to feed its most vulnerable people
Australian man punched in the face for defending Muslim women from abuse on train
David Starkey 'tells Amal Clooney to shut up and stop over-promoting human rights'
EU referendum: David Cameron to deny EU migrants and under-18s the chance to vote
iJobs Money & Business
£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...
£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...
£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...