87 206
Fashion Jobs
KOHLS
Full-Time Loss Prevention Supervisor
Permanent · CLERMONT
KOHLS
Full-Time Loss Prevention Supervisor
Permanent · DACULA
KOHLS
Technical Project Manager, Remote
Permanent · MENOMONEE FALLS
NAVY EXCHANGE
Vending Operations Clerk PT
Permanent · FALLON
NAVY EXCHANGE
Director, Facility Design %26 Construction
Permanent · VIRGINIA BEACH
NAVY EXCHANGE
Buyer (Level i And Level II) - Various Categories
Permanent · VIRGINIA BEACH
SPECIALIZED
Brand Development Manager - Michigan
Permanent · LANSING
ECCO
Third Keyholder
Permanent · ELIZABETH
ECCO
Third Keyholder
Permanent · LAS VEGAS
ECCO
Sales Manager - National Accounts (Remote)
Permanent · LONDONDERRY
ECCO
Third Keyholder
Permanent · ROSEMONT
LULULEMON
Community Specialist | Summit, Springfield Ave
Permanent · SUMMIT
LULULEMON
Expeditor | Cherry Creek
Permanent · DENVER
LULULEMON
Community Specialist | Friendly Center
Permanent · GREENSBORO
NORDSTROM
Customer Service Representative - Hillsdale Shopping Center
Permanent · SAN MATEO
NORDSTROM
Retail Stock - Mercer Mall Rack
Permanent · LAWRENCE TOWNSHIP
NORDSTROM
Manager- Service Experience- Baton Rouge Mall Rack
Permanent · BATON ROUGE
NORDSTROM
Retail Stock - Sugar House Rack
Permanent · SALT LAKE CITY
NORDSTROM
Asset Protection - Agent - Aventura
Permanent · AVENTURA
NORDSTROM
Retail Stock - Northwoods Rack
Permanent · SAN ANTONIO
NEIMAN MARCUS
Business Manager Tom Ford, Beauty (PT, 35 Hours) - FT. Worth
Permanent · FORT WORTH
NEIMAN MARCUS
Sales Manager, Designer Rtw
Permanent · CORAL GABLES
By
Reuters
Published
Nov 27, 2019
Reading time
2 minutes
Download
Download the article
Print
Text size

Investments, raw material prices weigh on main Ikea retailer's profit

By
Reuters
Published
Nov 27, 2019

Full-year operating profit at Ingka Group, which owns most IKEA stores, fell 10% as savings and increased sales failed to make up for higher purchasing costs and large investments as it adapts to digitalization and fast-changing shopper habits.


Reuters


The world’s biggest furniture retailer on Tuesday reported an operating profit of 2.03 billion euros ($2.24 billion) for its fiscal year through August.

The budget brand, known traditionally for its large out-of town self-service stores, is in the midst of tweaking its strategy, investing in digital and other services and smaller, more accessible store formats.

Ingka, which owns 374 traditional Ikea stores, online retailing and a growing number of new smaller store formats, said capital expenditure totaled 2.6 billion euros in the year, nearly as much as last year.

“We’re investing more than ever in our business with new city stores, a stronger digital meeting and more affordable service offers to our customers,” Ingka said in a statement.

In an interview at an Ikea kitchen showroom in the center of Stockholm, Ingka Chief Financial Officer Juvencio Maeztu said results were in line with the company’s expectations.

“We are transforming and performing, and this is not easy to do at the same time,” he said. “It gives a confidence boost. With all things going on in the retail industry, we feel good.”

Maeztu said investments would be higher in the current fiscal year than in 2018/19, spent primarily on more inner-city planning studios and stores, followed by digital technology.

“Besides that, we will keep acquiring companies at the edge of Ikea that can help us make Ikea better,” he said.

Ingka has over the past couple of years made its first-ever investments in external companies, such as British startup Winnow whose artificial intelligence technology helps its restaurants reduce food waste.

Brand owner Inter Ikea, which is in charge of supply, raised the prices it charges store owners during the year due to high costs for raw materials such as wood, but will this year lower them as the raw material costs have come down.

Maeztu told Reuters Ingka had not passed on Inter’s price hikes to shoppers, and it would this year lower its prices.

Ingka last year announced plans to cut 7,500 jobs, and in September reported a 5.0% rise in full-year local-currency retail sales to 36.7 billion euros.

It expects sales growth to accelerate going forward.

Despite a jump in online sales, the number of visits to traditional stores held up and like-for-like sales grew.

“It’s the totality that works,” Maeztu said. “You need to touch and feel. We are offering online, but the store will play a massive role in future. It’s not online or offline, its both.”

© Thomson Reuters 2024 All rights reserved.