Ikea reports profit boost for 2010

Swedish furniture giant Ikea on Friday reported a significant hike in net profit in 2010 as sales rose, especially in China, Russia and Portugal.

Ikea reports profit boost for 2010

Ikea, an unlisted, family-owned company that does not traditionally release regular earnings reports, said in its annual statement its net profit rose 6.1 percent to €2.7 billion ($3.6 billion) in its 2010 financial year — September 2009 to August 2010.

Global sales meanwhile jumped 7.7 percent to €23.1 billion, Ikea said, adding that its performance had been especially strong in China, Russia and Portugal.

Last year “was a good year for us, with increasing sales despite a tough market situation in many countries,” company president and chief executive Mikael Ohlsson said in a statement.

Ikea’s chief financial officer Sören Hansen agreed, pointing out that the year had been “unpredictable … with the effects of the financial crisis in 2009 still a reality for many of our customers.

“The conditions in our markets ranged from favourable to difficult,” he said in the annual report, adding however that financial year 2010 had “turned out to be a very good year for our retail operations, with growth in most markets.”

The company said its gross margin improved to 46.1 percent from 44.6 percent a year earlier.

During financial year 2010, Ikea said it opened 12 new stores in eight countries, and at the end of August counted a global total of 280 stores in 26 countries.

The company, which has 127,000 employees, said Europe accounted for 79 percent of sales, with North America on 15 percent and the Asia-Australia region the rest.

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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.