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IKEA

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

(Bolagsverket).

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.

IKEA

Ikea will buy back your used furniture at up to half the price

In the run-up to what would in normal times be the festive season sales rush, Ikea has vowed to buy back used furniture from customers to resell – and pay up to 50 percent of the original price.

Ikea will buy back your used furniture at up to half the price
Got any pieces of Ikea furniture at home? You may be able to get rid of it and get money back. Photo: Fredrik Sandberg/TT

Ikea, the world's largest furniture chain, said Tuesday it would begin buying back used furniture from customers to resell – and pay up to 50 percent of the original price.

The “Buy Back Friday” scheme, timed to coincide with the “Black Friday” pre-Christmas retail frenzy, will run from November 24th and until December 3rd in 27 countries.

“Rather than buy things you don't need this Black Friday, we want to help customers give their furniture a second life instead of making an impulse buy,” said Stefan Vanoverbeke, deputy retail operations manager at Ingka Group, Ikea's parent company.

To address concerns its affordable, flat-pack products encourage overconsumption and waste, the Swedish company had previously said it would start renting and recycling furniture as part of an eco-drive.

Under its buyback scheme, the group said that “anything that can't be resold will be recycled or donated to community projects to help those most affected by the Covid-19 pandemic”.

“Some countries like Australia and Canada for example are currently testing different buyback services, but BuyBack Friday will be the first time that 27 countries do this together,” the statement added.

The Swedish giant employs over 217,000 people and has more than 50 outlets. Its annual turnover is around 40 billion euros ($46 billion).

The group did not specify how it would determine the price paid for second-hand furniture and customers will receive a voucher, not cash, for their products.  

As part of efforts to reduce waste, Ikea has already begun repairing and re-packaging products in every store that have been damaged in transit, as well as allowing customers to return products – including furniture – for resale or donation to charities.

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