Ikea’s Annual Sales Exceed 40 Billion-Euro Mark for First Time

(Bloomberg) -- Ikea’s annual retail sales exceeded 40 billion euros ($44 billion) for the first time as the Swedish home-furnishings giant opened new stores and rolled out e-commerce in more markets.

Sales of products and services to Ikea customers rose 6.5% in the year through August to 41.3 billion euros, according to a statement Wednesday. It was the fastest growth since 2016.

“We passed a couple of big milestones,” Chief Executive Officer Torbjorn Loof of Inter Ikea, the worldwide franchisor for the brand, said in a phone interview. In addition to the revenue mark, these included the first year with more than 1 billion store visits, he said.

Ikea, which has 433 stores in more than 50 markets, is in the midst of its most ambitious international expansion. The company is branching out into South America for the first time. Ikea’s franchisees also plan to open new stores and launch e-commerce in Ukraine, New Zealand and Vietnam in coming years.

Major Ikea markets that posted the best growth during the year included Germany, the U.K., France and Russia, Loof said.

The Numbers

• 12 new Ikea stores were opened during the year. These included two smaller stores as the company tries new formats.
• Online shopping was introduced in nine new markets, helping e-commerce sales grow 43%. It now accounts for 7% of total sales, up 2 percentage points from a year earlier.
• E-commerce is now available in almost all Ikea markets and the company plans to roll it out in the remaining handful of locations in the coming 12 months, Loof said.

Asked whether the company is affected by uncertainty over the U.S.-China trade conflict, Brexit and a shaky global economy, Loof said Ikea is partly insulated from ups and downs because people still need to furnish their homes.

“When the economy is doing super well we may not benefit fully from that,” Loof said. “When the economy goes down, we are not that sensitive.”

To contact the reporter on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net

To contact the editors responsible for this story: Jonas Bergman at jbergman@bloomberg.net, ;Tasneem Hanfi Brögger at tbrogger@bloomberg.net, Eric Pfanner

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