Strong profits for Ikea in Sweden

The Swedish branch of Ikea ended the last fiscal year with a profit of 2.4 billion kronor. The current fiscal year is off to a good start, with the home-furnishing giant seeing no signs of a slow down.

Ikea AB is the parent company for the Ikea various Swedish-based subsidiaries, and consists of much more than just stores.

Several subsidiaries are comprised of foreign companies within the overall Ikea conglomerate and thus are supported by furniture giant’s strong global growth.

Turnover for Ikea AB rose from 27.5 billion to 30.8 billion kronor during the fiscal year ending August 31st, 2007. Profits before taxes rose from 2.1 billion to 2.4 billion kronor according to figures recently reported to the Swedish Companies Registration Office


One of the causes of the upswing in profits has been the growth of subsidiary Ikea Svenska Försäljnings AB, which comprises 16 of the 17 IKEA department stores in Sweden, as well as internet-sales.

“Our turnover increased by 13 percent and we are very happy with that,” said spokesperson Eva Stål.

The retail division represents nearly 40 percent of Ikea AB’s turnover. Other large contributions came from Ikea Svenska AB which handles distribution centers in Älmhult and Torsvik, as well as Ikea Freight Service AB, which takes care of purchasing and sales of transport services for all companies in the group. Information on the

profitability in each division is not released due to competition concerns.

New stores in Haparanda and Karlstad added to increased sales at Ikea retail stores, and brought the total number of employees increased from just below 5,000 to around 5,800.

But Ikea’s sales have also been helped by lower prices.

“We cut prices by an average of 5 percent which gave us good results,” said Stål.

As of now, the much discussed downturn in economic activity doesn’t appear to be affecting Ikea retail stores. Instead, Stål describes numbers from the fall and early winter as “very strong.”

“We are happy so far. But it’s clear that general economic conditions affect Ikea,” she added.