Ikea rings up $341m in full-year revenue here

Swedish retailer says largely flat figure in line with expectations; S-E Asia turnover up 20% to $1.2b

Ikea South-east Asia has two full-format stores in Singapore, located in Tampines (above) and Alexandra. During the fiscal year ended Aug 31, the firm opened an in-store interior design service touchpoint at the Alexandra outlet, servicing over 1,000
Ikea South-east Asia has two full-format stores in Singapore, located in Tampines (above) and Alexandra. During the fiscal year ended Aug 31, the firm opened an in-store interior design service touchpoint at the Alexandra outlet, servicing over 1,000 customers. ST PHOTO: KELVIN CHNG

Swedish home retailer Ikea generated a turnover of $341 million in Singapore for the fiscal year ended Aug 31, inching down 0.3 per cent, or $1 million, from a year ago.

"The overall healthy and largely flat turnover was in line with our expectations," Ms Corinna Schuler, head of corporate communication at Ikea South-east Asia, said yesterday. "In this economic climate, we're proud that our Singapore stores are keeping the loyal customers they have and raising brand awareness."

According to the Department of Statistics' July figures, the country's retail industry saw sales shrinking 8 per cent year on year for the category of home furnishings and household equipment, Ms Schuler pointed out.

"These are some of the toughest times Singapore retailers have seen," she said. "In the city state, we are challenged by declining consumer confidence and the lowest growth in annual GDP (gross domestic product) since the global financial crisis."

For the wider South-east Asian region, total revenue climbed by 20 per cent to reach $1.21 billion for fiscal year 2019 from $1 billion a year ago, according to the regional financial results released on Wednesday evening by Ikea South-east Asia.

Total revenue comprises retail sales as well as rental income generated from Ikea-anchored malls in the region.

Ikea South-east Asia is the franchisee that owns and operates stores and e-commerce in Singapore, Malaysia and Thailand.

The Malaysian business raked in $495 million in full-year revenue, while the Thailand business brought in $374 million.

In Singapore, Ikea South-east Asia has two full-format stores, located in Tampines and Alexandra. During the fiscal year, the company opened an in-store interior design service touchpoint at the Alexandra outlet, servicing over 1,000 customers and collaborating with Singapore freelancers and Livspace.com

From today to Oct 13, Ikea will offer a 50 per cent discount on all delivery charges for both online and offline purchases in the city state. "We are determined to maintain the trust of our customers in Singapore in spite of the tough economic indicators," Ms Schuler said.

Ikea South-east Asia delivered 353,000 orders to homes within the three regional markets for fiscal year 2019, up 38 per cent from a year ago. Business sales - to customers who furnish and decorate everything ranging from restaurants to apartment show suites with Ikea products - increased by 42 per cent year on year for the region.

Visits to Ikea South-east Asia's websites totalled 51.7 million, up 16 per cent from the previous year.

Two new Ikea stores - in the Philippines and Mexico - are under construction, the company said yesterday. In Johor Baru, Malaysia, the Ikea-anchored Toppen Shopping Centre is set to open in November.

Mr Christian Rojkjaer, managing director of Ikea South-east Asia, said on Wednesday: "We face increasing competition and changing customer behaviours, but our vision to create a better everyday life for many people is more powerful than ever."

He added: "We aim to offer the best deal there is in every market and we have a wide price ladder within our range so that, even in challenging times, Ikea has something for everyone, no matter the size of his wallet."

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A version of this article appeared in the print edition of The Straits Times on September 27, 2019, with the headline Ikea rings up $341m in full-year revenue here. Subscribe