T here’s still long lines in their parking lots and going out the door with carts piled high with goods, and that’s meant record sales this financial year, but furniture retail giant IKEA said it expects lower demand in several key markets. IKEA posted global sales of some 21 billion Euro for the financial year that ended August 31 and said it was the best in the group’s history, Sweden’s financial daily Dagens Industri reported. Chief Executive Anders Dahlvig attributed the strong sales to the 22 new department stores that were opened in the US, Europe, China and Russia. Since 1999 the furniture giant’s global sales have almost tripled. During the recent financial year, growth amounted to seven percent, compared to a 14 percent rise the previous financial year.
“The drop was partly an exchange-rate effect,” Dahlvig said, elaborating that with constant exchange rates, growth would have been at 10 percent. Regardless, the global economy also had an impact on the company, he added. “We have underestimated the downturn which is very much linked to the crisis in the housing sector,” he said, noting the ripple effect on sales of furniture and soft furnishings. Scandinavia, Asia and Eastern Europe also failed to offset the downturn in main markets such as Germany, the US and Britain, he said. IKEA, founded by Ingvar Kamprad in 1943, is not a listed company and does not disclose its profitability, but Dahlvig said the group had “strong finances.”