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Ikea's Swedish operation reports strong 2008 profits

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Ikea's Swedish operation reports strong 2008 profits
16:22 CET+01:00
The Swedish division of global home furnishings giant Ikea reported pre-tax profits of 2.1 billion kronor ($263 million) for the 2008 fiscal year, adding that shops remain crowded despite the financial crisis.

While profits remained strong for Ikea AB, the parent company which controls all of Ikea's operations in Sweden, figures were down slightly from the record 2.4 billion kronor in profits reported in 2007.

“We didn't beat the record we set last year, but overall it's a very strong result which we're very happy about,” said Ylva Magnusson, a spokesperson with Ikea's retail and online sales unit, to the TT news agency.

Ikea's retail stores increased their turnover by 6 percent to 12.3 billion kronor, despite signs of the weakening economy.

“We believe we have a very strong offering when people feel the need to have something left over in their wallets,” said Magnusson.

Overall, 32 million people visited Ikea stores in Sweden in the last fiscal year which ran through August 2008.

While the financial crisis didn't fully emerge until September, which marks the start of Ikea's new fiscal year, Magnusson said the company remains confident about the future.

“We're not immune to world events. But things are still going well, even if it's not quite as good as we had planned and hoped for,” she said.

“If you go to our stores and look, there are still a lot of people there, so we feel pretty safe.”

Currently, Ikea AB has no plans to cut back on costs and expansion plans continue to move forward.

Next year, the company plans to open new stores in Uppsala and Malmö, with additional stores planned for Helsingborg in the south, Västerås in central Sweden, and Uddevalla in the west.

Several of the Ikea subsidiaries included in Ikea AB earn money not only from serving the company's Swedish stores, but also from supplying foreign operations of Ikea's massive global operations.

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