Ikea assembles rise in sales

Emerging markets such as China have proven to be lucrative for the Swedish retailer. Picture: Getty
Emerging markets such as China have proven to be lucrative for the Swedish retailer. Picture: Getty
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RISING demand in China, North America and Russia helped Swedish flat-pack specialist Ikea to post a solid rise in its global sales.

The firm – which is due to issue its full financial results in January – said sales hit €27.9 billion (£23.7bn) in the year to 31 August, a 3.6 per cent increase after currency movements were taken into account.

Like-for-like sales – which strip out the effects of stores being opened or being extended – for the chain grew by a more modest 1.8 per cent.

However, the company warned that its stores in southern Europe “continued being affected by the current econo-mic situation”.

Peter Agnefjäll, president and chief executive at Ikea, said: “Value for money is increasingly important to our customers.”

Agnefjäll said the group will convert all of its lighting products to use energy-efficient light-emitting diodes (LEDs) instead of traditional lightbulbs by 2016.

“Sustainability should not be a luxury good,” he added. “Reducing household energy bills is the most important issue for many people today when it comes to living more sustainably at home.

“In the past year, we sold 20 million energy-saving LED products at affordable prices, helping people to do just that.”

Ikea did not give a country-by-country breakdown for its sales figures, nor did it release information about its profits.

The 2013 sales rise marks a slowdown from the 2012 increase, when global turnover had grown by 9.5 per cent, or 7.1 per cent when adjusted for currency fluctuations. Pre-tax profits for the same period had risen by 8 per cent to €3.2bn.

That increase included a 6.3 per cent rise in total sales in the UK to £1.23bn, the biggest surge for six years.

Globally, the group had also attributed last year’s sales rise to progress in emerging markets such as China and Russia, as well as growth in Germany and the US.

Ikea was founded in 1943 and now has 303 branches in 26 countries, employing 139,000 staff and being visited by some 690 million customers a year.

Eighteen of the company’s stores are in the UK – including outlets in Edinburgh and Glasgow – and the firm has planning permission to build its 19th at Calcot in Reading. The group also wants to open a branch in Exeter and an outlet next to the Meadowhall Retail Park in Sheffield.

Gillian Drakeford, Ikea’s retail country manager in China, took over as the country manager for the UK and Ireland on 1 August.

She replaced Carole Reddish, who had been the acting manager in the British Isles for the past 18 months, and who is now in charge of the company’s operations in Norway.

Drakeford was part of the management team that had opened Ikea’s first store in the UK at Warrington in 1987.

At the time of the latest appointments, Jeanette Söderberg, region retail manager for north central Europe, said: “I am happy to welcome Gillian to the UK and Ireland. Her personal capabilities, experience and energising leadership will be of great support in delivering the strong business agenda”.