IKEA posts record profit

Sweden's IKEA, the world's biggest furniture retailer, posted on Friday a record profit for the fiscal 2010/11 year on the back of growing sales and a bigger share in almost all of its markets.

Net profit at the privately-held Swedish firm, known the world over for low-price, self-assembly, flat-packed furniture, rose 10.3 per cent to 2.97bn euros (1.18 billion pounds) in the year to last August.

Revenue grew 6.9 per cent to a record 25.17bn euros, with existing stores accounting for 2.7 per cent of sales growth.

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"We have gained market share in more or less all markets," IKEA Chief Executive Mikael Ohlsson said.

"Despite price increases for many raw materials, we have lowered prices to our customers by 2.6 percent, while the quality of our products has improved."

Soren Hansen, vice president for the group, said sales grew in almost all countries with the biggest gains seen in Russia, China and Poland.

In 2009/10, net profit was up six per cent to 2.69bn euros, while revenue was up eight per cent to a record 23.5bn with existing stores accounting for 2.4 percent of sales growth.

IKEA plans to invest 3bn euros in stores, factories and retail centres, as well as in the expansion of its wind farms and solar power sources this year.

The firm, owned by a foundation led by founder Ingvar Kamprad, opened 7 new stores in the year, fewer than the 12 stores it opened in 2009/10. As of the end of August 2011, IKEA had 287 stores in 26 countries and 131,000 employees.

Furniture retailers have been among the hardest hit store groups as cash-strapped shoppers have cut back on discretionary areas of spending. Disposable incomes across much of Europe and the United States are being squeezed by rising prices, muted wages growth and government austerity measures.

IKEA says it is relatively uncyclical since its budget furniture and home accessories attract more cost-conscious consumers in tough times.