Ikea Singapore revenue dips to $341m for fiscal year; South-east Asia turnover up 20%

Total revenue comprises retail sales as well as rental income generated from the three Ikea-anchored malls in the wider South-east Asia region. PHOTO: ST FILE

SINGAPORE - Swedish home retailer Ikea generated a turnover of $341 million in Singapore for fiscal 2019 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," Corinna Schuler, head of corporate communication at Ikea South-east Asia, told The Business Times (BT) on Thursday (Sept 26).

"In this economic climate, we're proud that our Singapore stores are keeping the loyal customers they have and raising brand awareness," she added.

According to Singstat's 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 since the global financial crisis."

For the wider South-east Asia region, total revenue climbed by 20 per cent to reach $1.21 billion for FY2019 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 Thailand brought in $374 million.

In Singapore, it 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 more than 1,000 customers and collaborating with Singapore freelancers and Livspace.com.

Starting Friday, Ikea will also 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.

Meanwhile, Ikea South-east Asia delivered 353,000 orders to homes within the three regional markets for FY2019, up 38 per cent from a year ago.

Business sales - to customers who furnish and decorate everything 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 on Thursday. The Ikea-anchored Toppen Shopping Centre in Johor Bahru, Malaysia, is also set to open in November this year.

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."

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

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