Swedish-Dutch retailer Inter Ikea's retail sales up 6.5% in FY22

Although the impact by measures to stop the spread of COVID-19 reduced, the direct and indirect consequences of the war in Ukraine and specifically the negative effects of the energy crisis and inflation did affect the franchisees’ Ikea retail sales, the company said in a press release.

Net profit for Inter Ikea Group amounted to €0.7 billion, down from €1.4 billion last year.

Operating expenses went up as the company invested in capability for the strategic and digital changes needed to improve the Ikea value chain and the (online) Ikea sales experience. In addition, there were additional costs for managing the complexities and inefficiencies of the supply chain, and one-off costs connected to stopping supply operations in Russia and the continued scale down of Inter Ikea Group presence.

Martin van Dam, CFO of Inter Ikea Group, said: “With the strong connection to retail sales development, the volumes sold to the Ikea retailers also decreased, specifically in the second half of the financial year.

“In order to keep the prices of the Ikea products as low and stable as possible, Inter Ikea group has over the last couple of years absorbed increasing purchases and transport cost. This is the main cause of the lower gross margin and profitability.

“Inter Ikea Group continues to focus on growth and securing price levels to franchisees that offer value to the many Ikea customers. This remains an important element in our approach to conquer these challenging economic times.”

Fibre2Fashion News Desk (DP)