Sales at the Irish arm of home furnishings giant Ikea rose to 190.89 million euros last year – or 3.67 million euros a week – as the company sold more goods online than in stores for the first time.
In a pivotal year for Dublin-based Ikea Ireland Ltd, profit before tax rose marginally from €3.69m to €3.76m in the 12 months to the end of August last year.
Directors state that “the business became more profitable despite the challenges of 2021 with its ongoing store closures and ongoing economic uncertainty.”
The company’s Ballymun brick-and-mortar flagship store was closed from late December 2020 until May 17 last year as part of a government-enforced Covid-19 retail shutdown, and on the day it reopened the store was “the best performing” of the 378 branches of the group in 30 countries.
The company noted the increased profits on online sales, which more than doubled from €42.39 million to €99.26 million.
During the company’s second year hit by the Covid-19 pandemic, directors say online sales accounted for 52 percent of sales, compared to 24 percent in fiscal 2020 and 16 percent in fiscal 2019.
Revenue increased 8 per cent, or €14.22 million, from €176.66 million, and directors state that “we have seen a great appetite from our customers to upgrade their homes and make their homes increasingly multifunctional ‘, with movement still restricted due to Covid-19 and many of the Irish population continue to work from home.
Directors state that the increase in online sales has accelerated the implementation of many of its transformational plans, such as Click and Collect and in-store fulfillment of online orders, to provide additional capacity to meet online demand.
The Irish entity paid €3 million in dividends.
The Company recorded an operating profit of €4.479 million and after accounting for net interest payments of €717,186, the Company recorded a pre-tax profit of €3.76 million.
Ikea Ireland has expanded since year-end with the opening of two Home Service Points (HSPs) in Naas in November 2021 and at St Stephen’s Green Shopping Center in Dublin in February this year.
The ‘low-cost’ stores are 70 to 100m² in size and each have a target turnover of €1.5m per year, and the spending on each store was ‘under budget’.
Directors note that “initial customer feedback has been very positive.”
Ikea Ireland’s workforce increased from 695 to 699 last year as staff costs rose marginally from €17.66m to €17.87m.
Management board salaries rose from €227,709 to €277,763 last year.
The previous year’s profit includes non-cash depreciation and amortization costs of €2.39 million and operating lease fees of €898,661.
The shareholder funds amounted to €29.5 million.
https://www.independent.ie/business/irish/ikeas-profits-up-as-online-sales-double-during-covid-41841116.html Ikea’s profits soar as online sales double during Covid