Russia and China lead huge sales jump for Ikea

Ikea, the world's top furniture company, said on Thursday its sales jumped 11.2 percent during its 2014-2015 fiscal year, thanks to gains in nearly all markets but particularly in China and Germany.

Russia and China lead huge sales jump for Ikea
Ikea saw the fastest growing markets in China and Russia. Photo: TT
The Ikea Group, the Dutch holding company which controls the Swedish brand's 328 stores in 28 countries, said sales totalled €31.9 billion ($35.7 billion).
China was the company's fastest growing market followed by Russia, with most of the sales growth, 5.1 percent, coming from existing stores.
Adjusted for currency fluctuations, sales rose by 8.9 percent.
“We are continuing to grow strongly in China thanks to the middle class which is showing more and more interest in home comfort,” chief executive Peter Agnefjäll told AFP.
Ikea opened three new stores in China during its 2014-2015 fiscal year.
Meanwhile Ikea said it registered record growth in Germany and North America performed well.
Still absent from Africa and South America, the specialist in flat-pack furniture that budget-minded consumers can assemble themselves, opened 13 new stores and welcomed 770 million visitors.
“Looking ahead, we see many opportunities for us to continue to grow through our stores…”, Agnefjaell said in a company statement.
He declined to confirm on information in the media that the group aims to create 100,000 new jobs by 2020.
“We are pursuing a growth strategy and we'll need to recruit in the years to come,” he told AFP.
While Asia was a priority, he said Ikea's management had always put emphasis on getting things right before studying opportunities for further development.
Despite the Dutch-registered company, Ikea is still managed from the town of Älmhult in southern Sweden, where it was founded in 1943 by Ingvar Kamprad.
Kamprad, whose fortune is estimated at more than €30 billion, still has a hand in running the company, and three children are part of the management.
As it is family-owned, Ikea is required to publish only limited information about its results. The company's annual report will be published in December.


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.