Ikea plots £150m UK investment
Furniture giant Ikea revealed plans today to invest £150m (€218m) at its UK stores as it insulates itself against the gloom on the high street.
The Swedish firm – famous for its flat-pack furniture and huge superstores - said it would look to increase sales capacity, including through the addition of new trading floors, while also improving parking and in-store safety.
Details emerged as Ikea reported a 4% hike in UK same-store sales for the year to September 30, outperforming many of its rivals in the troubled furniture sector.
Mid-Europe boss Peter Hogsted told Retail Week that the performance had to be seen in the context of last year’s “very strong growth”, when same-store sales lifted 15%. He said sales had been slower, especially in the last six months.
He added: “We have decided to use this time to trade as well as possible. We are preparing for a change in times ahead.”
The firm, which has 13 outlets in the UK, has already said it plans to open between 20 and 25 stores there in the next decade.
The furniture giant is also set to enter the Irish market at a proposed site in Ballymun, north Dublin, after the relaxation of Irish planning rules on store sizes.
Tough trading conditions have hit numerous UK retailers in recent months, amid a reluctance among consumers to splash out on big-ticket items. This contributed to operator Furnitureland going into administration last week and the collapse of the Courts chain last year.
Privately-owned Ikea broke into the UK market in 1987 with its first store in north London. It employs a total of around 7,500 staff in the UK at locations including Birmingham, Edinburgh, Manchester and Glasgow, and is due to open a new store in Milton Keynes in January.
The wider group started selling furniture in 1947 and now has more than 180 stores across 31 countries. Its biggest market is Germany, which accounts for around a fifth of sales, followed by the UK with 12%, then the United States, France and Sweden.
It keeps prices low by packing and shipping items in flat packs, ensuring its profit margins are higher than its rivals.
