FLAT-PACK furniture giant Ikea 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 includes a store at Birstall among 287 stores in 26 countries, lifted sales by 6.9% to £20.6bn in the year to August 31 – with Russia, Poland and China leading the way.
Last month, the company announced a 3% fall in sales at its 18 UK stores to £1.15bn after it suffered in the consumer spending squeeze and a stagnant housing market.
But growth in most other countries – along with cost reductions and lower interest payments – helped lift profits by 10.3% to £2.5bn, despite a slight drop in its gross margin.
It claims to have lowered prices by an average of 2.6% in a bid to attract customers as many of its markets around the world fight economic gloom.
Ikea opened stores in China, Germany, Italy, Norway, Russia, Switzerland, Australia, France, Spain and the US in the year, creating 4,000 jobs.
It plans to invest 3bn euro on its expansion plans this year and is also considering its first move into India.
The company also plans other openings in China, Japan, Finland and Italy.
It has not opened a store in the UK since Southampton in February, 2009, but re-submitted a planning application in Reading last week and is looking at other sites in this country.
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 £26.6m this year in improving its store environment.
Strong kitchen sales, which were up by 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 a quarter.