Swedish furniture giant Ikea reported on Wednesday an 8.0-per cent rise in full-year profit and said it was benefiting from more cost-conscious consumers.Net profit rose eight per cent to 3.2 billion euros ($4.3 billion) as revenue rose 9.8 per cent to 27.6 billion euros in the year ending August 31.
“Customers are getting more and more value conscious, which makes Ikea a better choice,” Mikael Ohlsson, chief executive of the Ikea Group, said in a statement.
“The economic conditions throughout the world are challenging and have affected people’s lives and consumption,” he added.
Operating profit was down three per cent as raw material prices rose and the company tried to keep more products in stock by raising inventories.
“To make sure that our customers always find the products they need when shopping at Ikea, inventory levels were kept deliberately high, a step that in turn supported sales,” Ohlsson said.
The company, the world’s biggest furniture retailer, which is an unlisted, family-owned company that only recently began releasing more regular earnings reports, said around 4.6 per cent of its growth came from existing stores after adjusting for currency changes.
“Some of the biggest growth was in China, Russia and Poland, but the US and Germany also had significant growth,” Ohlsson said.
Europe accounted for 70 per cent of sales, while North America stood for 16 per cent and Russia and Asia and Australia made up the remaining 14 per cent.
The Ikea Group opened 11 new stores in nine countries in the period. At the end of the year, it had a total of 298 stores in 26 countries.
Traffic to its website rose by 21.8 per cent to more than a billion visits.
Ikea, which sparked controversy last year when women were removed from the pages of its Saudi Arabian catalogue, also said it had launched “a common diversity and inclusion approach.”
“Today, almost half of our 17,000 managers are women, and our co-workers come from all cultural and educational backgrounds,” the company said.
Copyright (2013) AFP. All rights reserved.
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