Ikea lifts veil on results for first time

Ikea lifts veil on results for first time


Ikea, the Swedish retailer known from Stockholm to Shanghai for its low-priced furniture, has publicly disclosed its profits for the first time in its 67-year history.

The disclosure came a year after the company’s culture came under attack from a former senior manager who was once close to Ingvar Kamprad, the founder.

In his book The Truth about Ikea, Johan Stenebo alleged that the company was run by a sect allied to Mr Kamprad, whose family controls the foundation behind the business.

The book claimed that Ikea ran an internal network of spies and that the Swedish management was contemptuous of foreigners. Ikea denied the allegations, but its decision to lift the veil on its results suggests that the criticism has stung.

In an interview in India on Friday, Mikael Ohlsson, Ikea’s chief executive, said that the disclosure of its profits came in response to demands from employees and suppliers for more information.

Until now the company has only published annual sales figures for its chain of retail outlets.

The group, privately owned by one of the largest foundations, said that it had made net profits of €2.5bn ($3.4bn) in 2009, up 11.3 per cent from the year before in spite of the downturn in consumer spending.


Mikael Ohlsson, Ikea’s chief executive, has made greater transparency for employees and customers a priority
In addition to the 2009 figures, the company announced a 7.7 per cent increase in revenues for the 2010 financial year to €23.1bn.

But it said that it would not report profits for 2010 until later. Mr Ohlsson, who has been in the job a year, told the Financial Times that more openness was required as interest in Ikea mounted.

The company wants to build a presence in markets such as China, Russia and India.

It plans new stores in South Korea, Croatia and Serbia as part of a growth strategy.

Europe accounts for 79 per cent of sales, North America 15 per cent and Asia 6 per cent.

Top executives said that the company wanted to maintain its financial independence under the ownership of the Stichting INGKA Foundation.

They denied that the move to publish financial statements was preparation for a possible capital raising on financial markets.

The group paid no dividend to its controlling foundation but instead reinvested profits in existing and new Ikea stores, the company said in a statement.

It has 280 stores in 26 countries, with 12 opened so far in 2010.

source: ft.com