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Ikea sales driven up by growing Chinese middle class Ikea sales driven up by growing Chinese middle class
(about 4 hours later)
Ikea, the world's largest furniture company, has reported steady growth in sales, as China's growing middle class embraces its flat-pack furniture and Scandinavian designs. Ikea, the world's largest furniture company, has reported steadily growing sales as China's expanding middle class embraces its flat-pack furniture and minimalist Scandinavian design.
The Swedish company announced sales for the 12 months to the end of August rose 3.6% on last year, boosting revenues to €29bn (£23.2bn).The Swedish company announced sales for the 12 months to the end of August rose 3.6% on last year, boosting revenues to €29bn (£23.2bn).
The figures underscore how getting lost in Ikea's maze-like stores or the frustrations of assembling a flat-pack chest of drawers are fast becoming global experiences. Ikea now has 315 stores in 27 countries, and plans to open its first outlets in South Korea and India. Getting lost in Ikea's maze-like stores or experiencing the frustrations of assembling a flat-pack chest of drawers are fast becoming global experiences as the company now has 315 stores in 27 countries. It is planning its first outlets in South Korea and India.
China, home to eight of Ikea's 10 largest stores, has become the company's fastest-growing market, as the mass migration into cities helps create a new middle class with money to spend. China, home to eight of Ikea's 10 largest stores, has become the company's fastest-growing market, as the mass migration into cities helps create a middle class with money to spend.
Ikea said its business had also performed well in North America, where the economic climate had improved.Ikea said its business had also performed well in North America, where the economic climate had improved.
In Europe, which still accounts for almost 70% of Ikea's turnover, sales also improved, although the company warned that "the challenging situation may not be over", with eurozone economic growth flat and deflationary pressures looming. In Europe, which accounts for almost 70% of Ikea's turnover, sales also improved, although the company said "the challenging situation may not be over", with eurozone economic growth flat and deflationary pressures looming.
"We continue to see positive signs in consumer spending and it's a great joy to report growth in almost all our markets, not least in the challenging markets in southern Europe," said Ikea's chief executive, Peter Agnefjäll."We continue to see positive signs in consumer spending and it's a great joy to report growth in almost all our markets, not least in the challenging markets in southern Europe," said Ikea's chief executive, Peter Agnefjäll.
The furniture giant, which was an early entrant into several countries in the former Soviet Union, also faces an economic slowdown in Ukraine and Russia, the latter of which has become one of Ikea's key developing markets, accounting for 7% of turnover. Consumer spending has slowed sharply amid rising international tension. Ikea also faces economic slowdown in Russia, which has become one of its key developing markets, accounting for 7% of turnover. Consumer spending has slowed sharply amid rising international tension.
The company said: "The strained Russian-Ukrainian relations have created a serious situation and we are following the development closely. We hope for a constructive solution." Ikea said online shopping and store visits were up, with more information available in its annual report early next year.
Ikea said online shopping and store visits were both up, although the company is not revealing more information until it publishes its annual report in early 2015.
"Looking ahead, I see great opportunities for continued growth," said Agnefjäll."Looking ahead, I see great opportunities for continued growth," said Agnefjäll.