Ikea hits record profits and sees signs of recovery

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FURNITURE maker IKEA Group said it saw signs of a recovery in consumer spending as it posted record full year profits.

Ikea, whose warehouse-like stores sell everything from highchairs to fitted kitchens, posted a net profit of 3.3bn euros in the 12 months through to August 2013, up 3.1 per cent on a year earlier.

Ikea

Ikea

“Consumer spending is improving in many countries,” Ikea chief executive Peter Agnefjall said in a statement. “While the challenging economic situation may not be over, there are positive signs.”

Ikea UK announced total sales of £1.268bn for the financial year ending August 31 2013, an increase of 3.1 per cent on the previous year. Ikea UK has 18 stores, including a store in Batley which employs more than 300 staff.

Ikea also wants to develop a £60m store near Meadowhall in South Yorkshire. Sheffield Council is expected to issue its planning recommendation on this proposed development soon.

Gillian Drakeford, Ikea UK retail manager, said: “With the continued uncertainty around the recovery from the recession, we have continued to invest across our online and in-store shopping channels to create a simpler, more convenient and enjoyable experience and it’s very humbling that our efforts have resulted in another year of growth.”

Ms Drakeford added: “By focusing on understanding our customers, their shopping needs and behaviours as well as being as relevant as we can with our home furnishing product offer, we have built a great foundation for strengthening the perception of the Ikea brand in the UK to deliver sustained growth.

“The medium-term picture for the home furnishing market looks bright and I believe this, coupled with our investments to improve the shopping experience, gives us the opportunity to double our turnover and total market share by 2020.

“Over the coming year we will be putting a renewed focus on our kitchens business, making Ikea the most simple and convenient retailer to buy a kitchen as well as the best value for money in the market. We will invest £8m in improving the kitchen business, including rebuilding all showrooms, staff training, improving our delivery and installation services as well as offering a completely redesigned kitchen system.”

Ikea said it had seen strong growth in China, as well as in Russia and the US. Southern Europe, still suffering from the effects of the downturn, was showing some positive signs.