Ikea posts €39bn profit with boost from city stores, online sales

Ikea posts €39bn profit with boost from city stores, online sales

The largest franchisee is IKEA Group, with 367 stores. Bengaluru is a special city for us as we have active participation from our total value chain including IKEA Foundation, IKEA suppliers, IKEA social entrepreneurs and now IKEA retail.

IKEA, which makes most of its sales in Europe, opened its first store in India this year and announced plans to enter Latin America, starting with Chile in 2020 followed by Colombia and Peru.

Welcoming IKEA to the State, Deputy Chief Minister G Parameshwara said: "IKEA's entry reflects Karnataka's progressive policies for ease of doing business".

Ikea recently begun opening smaller shops in city centres that have less stock as part of a major transformation that has also seen it move more resources to e-commerce and focus more on emerging markets.

"We could easily have one such store in New Zealand".

"What is possible is that Ikea may modify its business model to serve untapped markets, such as New Zealand, in a different type of way".

Ikea is not listed and as a result it is not obligated to publish its net profit or other financial details.

But Ikea has, over the years, constantly reiterated its main priority of meeting its quality commitments towards customers and co-workers, and alluded that India offered a significant enough market opportunity that was worth being patient for.

Total retail sales, which include sales of both products and services, rose to €38.8 billion (NZ$69.29 billion) from €38.3b a year earlier.

IKEA reported a 5 per cent rise in annual sales on Wednesday as strong online growth and new stores in countries such as India and Latvia helped the world's biggest furniture retailer to cope with mounting competition. In its fiscal year 2019, which runs through August, a total of 15 retail locations are planned.

"It's fantastic to see human interaction through technology when the consumer might need help or advice on where to place furniture", she told Reuters in an interview at a new IKEA city-centre store in Madrid dedicated to living room furniture.

Last year Ikea's United Kingdom profits slumped by almost 40% to £87m, a decline blamed on higher wages and the cost of investments in its stores and website. The company is also exploring selling its products on external online marketplaces and Loof said he hopes to introduce a collaboration with a digital shopping platform in the coming year.

"We're very excited to open in South America", Loof said. Now, we realise that India presents a much bigger opportunity for which ₹10,500 crore is inadequate.

Ikea sales grew by 2% past year, well below the 7% average of the previous five, while an investigation by the European commission is shining a fresh light on the company's complex tax structure.

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