Inter IKEA revenues down 8.9 to 26.5 bln euros
Net profit jumps to 2.2 bln euros
IKEA brand owner lowered prices by 15 on average
Franchisor signs deal to acquire stores in Baltics
LONDON, Nov 8 Reuters Inter IKEA, the owner of the world39;s biggest furniture brand, reported higher profits for 2024 thanks to lower interest payments, despite a sharp decline in revenues after it cut prices across its range of products like BILLY bookcases.
The price reductions are an attempt to boost IKEA39;s affordability after it hiked prices significantly in 20212022 when supply chain disruptions raised raw material costs.
Inter IKEA, which supplies the stores to which it franchises the IKEA brand, lowered its prices by an average of 15 over the year, Chief Financial Officer Henrik Elm said, allowing IKEA retailers to cut prices for customers by an average of 10, after the cost of commodities like wood fell.
Price cuts drove Inter IKEA39;s revenues down 8.9 to 26.5 billion euros 28.58 billion for its financial year ending Aug 31. But Inter IKEA said lower prices were encouraging customers to buy more, helping to boost operating profit to 2.3 billion euros, up from 2.2 billion euros in 2023.
You could say that, in rough terms, we are back to where we were preCOVID in prices, if you would adjust it for inflation, said Elm, adding that the company aims to bring prices down further this year but could not give an estimate.
Price cuts impacted Inter IKEA39;s wholesale sales to…