The world's biggest furniture retailer has posted the same profit as last year. But the Swedish firm's CEO told Reuters the flat-packed specialist is still seeing growth in all markets, including Europe and Russia. Hayley Platt reports
IKEA is best known for its flatpack furniture and Swedish meatballs. It's also the world's biggest furniture retailer. And while others have been struggling, last year it managed to grow its business in almost all of its markets. Food did especially well and it will retain its sales goal of 50 bln euros by 2020. Net profit was unchanged at around 3.3 billion euros. But Chief Executive Peter Agnefjall says that's largely due to a multi-million euro payout for staff. SOUNDBITE: Peter Agnefjall, IKEA Group, President and CEO, saying (English): "We've set aside close to 300 million euros more to one IKEA bonus program now covering all IKEA co-workers and we have introduced a long term loyalty program where we've set aside 200 million euros which is a long term plan." IKEA operates 361 stores in more than 40 countries. Some are franchises but most it owns. It's biggest market is Europe. But sales rose fastest in China, Russia and Hungary. The appeal for a slice of Swedish life has even spread to South Korea, where IKEA opened it's first store at the end of last year. Robert Haigh is from Brand Finance. SOUNDBITE: Robert Haigh, Marketing Director, Brand Finance, saying (English): "Scandinavian countries and Sweden in particular are seen as socially progressive and for that reason desirable. Leading a sort of Scandinavian lifestyle even if it's just having a chest of drawers, it allows people to buy into the idea of IKEA." The results of that other Swedish retail giant H&M didn't impress quite as much, despite a 7% rise in profit. The fashion retailer missed its quarterly earnings forecasts, knocking shares by 2 percent. It's been investing in its website and a new beauty line, along with some higher-price brands as protection from discounters like Primark and Forever 21. Ikea doesn't have that sort for direct competition. But both will be hoping last week's ECB's decision to inject 1.1 trillion euros into their main market will ultimately benefit them both.