China drives Ikea growth

China has been cited as one of the major contributors to a year in which Ikea’s profits surged 19.6 per cent.

Ikea growth was strongest in China, while the company’s largest markets were Germany, the US, France, Britain and Sweden.

The Stockholm-headquartered furniture and homewares retailer reported a profit of 4.2 billion euros ($US4.5 billion). Total sales rose 7.1 per cent to 34.2 billion euros for the 2016 financial year ending in August, the company said.

In the past year Ikea has opened 12 new stores and 19 pick-up and order points worldwide, and in the coming year planned to open its first stores in Serbia and in Hyderabad, India.

“Growth and profitability give us freedom to choose our own way, the flexibility to move fast and the independence to think and invest long term,” Peter Agnefjall, Ikea Group CEO, said in a statement.

The retailer registered 783 million visits to its 340 stores in 28 countries during the 12-month period but was also expanding its online offers. In addition, 49 stores are operated by other franchises.

As part of its efforts to reduce its environmental footprint, the company said it was to invest 1 billion euros in sustainable materials. This included forestry and firms involved in recycling, renewable energy and developing biomaterials.

It said 71 per cent of the energy it used in 2016 came from renewable energy sources such as solar and wind farms. Ikea plans to be energy independent by 2020.

  • Original reporting from AAP.


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