STOCKHOLM (Reuters) - IKEA, the world’s largest furniture retailer, is set to speed up its store expansion pace as part of a bid to further boost growth after another year with record turnover.
IKEA said on Monday it had promoted its current Sweden boss, company veteran Peter Agnefjall, 41, new chief executive from September 2013 after Mikael Ohlsson, on the job since 2009, informed the board he wished to step down a year from now after 34 years with the company.
Agnefjall told Reuters in a joint telephone interview with Ohlsson that the privately held firm, famous for budget furniture in self-build flat packs and huge stores, would aim to boost growth further.
“We have a positive view on the future ... and we believe possibilities are still great even if the global economy stays shaky for another while,” he said.
IKEA would from 2014-2015 increase the pace of new store openings to 20-25 per year, first and foremost in existing markets, according to the executives. In 2010/2011, IKEA opened seven stores and in 2011/12, 11 stores.
“We have had very good (sales) growth in the past 3-4 years, mainly from our existing stores. We have ... held back on new store expansion. Now we will increase the pace again,” Ohlsson said.
In China, IKEA will open three new stores per year from next year.
The IKEA group currently owns 295 stores in 26 countries.
Ohlsson said IKEA grew turnover by about 7 percent in its fiscal year to August 31 on volume growth of about 8 percent, which would mean sales hit a record 27.0 billion euros.
The year before, sales also grew 7 percent, to 25.2 billion euros.
“It looks like we had a good year. We gained shares in all markets,” Ohlsson said ahead of the full earnings report which is due in January. In 2010/11, IKEA grew net profit to a record 2.97 billion euros.
Furniture retailers have been hit hard as cash-strapped shoppers have cut back on discretionary areas of spending. IKEA says it is relatively uncyclical since its budget furniture and home accessories attract more cost-conscious consumers in tough times.
Ohlsson said IKEA had continued to lower prices in the past year and expected to continue to do so in coming years. In 2010/11, IKEA cut prices by 2.6 percent.
Reporting by Anna Ringstrom