Ikea profits rise 10% as emerging markets boost sales

Ikea's new global store openings have included China

Swedish flat-pack furniture firm Ikea has unveiled a 10% rise in profits as emerging markets helped boost demand against a tough UK retail backdrop.

The firm said sales grew 6.9% to 24.7bn euros (£20.6bn; $31.9bn) in the year to 31 August, with Russia, China and Poland performing strongly.

The overseas growth, as well as cutting prices, helped profits rise 10.3% to 3bn euros.

This came despite a 3% drop in UK sales to £1.15bn over the results period.

To combat the sluggish UK retail market, Ikea said it lowered UK product prices by 5% across the home furnishings range compared with the previous year, and added 800 more products for customers to buy online, where sales grew by more than 25%.

India plans

Ikea opened stores in China, Germany, Italy, Norway, Russia, Switzerland and the US in the year, creating 4,000 jobs.

The firm, founded in the 1940s, now has 287 stores in 26 countries. It plans to invest 3bn euro on its expansion plans this year and is considering its first move into India.

The company also has plans to open further stores in China, Japan, Finland and Italy.

Ikea's chief financial officer, Soeren Hansen, said the fiscal year had been "a challenging period" but added that "being cost-conscious is part of the Ikea DNA".

"We're fortunate to have the resources to safely navigate uncertain economic climates," he said.