UPDATE 2-IKEA sees consumer recovery worldwide, posts record profit

Tue Jan 28, 2014 8:34am EST

* Full year 2012/2013 net profit up 3.1 pct to 3.3 bln euros

* Strongest growth in China, Russia and United States

* CEO says positive signs in economies across IKEA's markets

* IKEA says to invest 2.5 bln euros in full year 2013/2014 (Adds CEO comment)

By Simon Johnson

STOCKHOLM, Jan 28 (Reuters) - World No. 1 furniture maker IKEA Group said on Tuesday it saw signs of a recovery in consumer spending in many of its markets as it posted record full-year profits and set its sights on growing revenues to 50 billion euros ($68.37 billion) by 2020.

Retailers have been struggling particularly in Europe, where IKEA generates nearly 70 percent of its sales, as the global economic downturn and austerity measures hurt consumer sentiment and spending power in many markets.

IKEA, whose warehouse-like stores sell everything from highchairs to fitted kitchens, has been an exception. It posted a net profit of 3.3 billion euros ($4.51 billion) in the 12 months through August 2013, up 3.1 percent on a year earlier. 2012 was also a record year.

"Consumers have become more and more confident and have started to shop a bit more and open their wallets a bit more often," IKEA Group CEO Peter Agnefjall told reporters.

He said IKEA had grown strongly in the United States, Russia and China during the year.

"Even in southern Europe - Portugal for example - we see clear signs of growth," Agnefjall said.

Sales fell, however, in Italy and Spain, the company said.

Agnefjall said IKEA remained focused on lifting turnover to 50 billion euros by 2020, up from 27.9 billion euros in the 2013 financial year.

Although IKEA will expand into new countries such as India in coming years, much of its growth will be in existing markets, where Agnefjall said there is still much to do through improving products, lowering prices and widening services.

"We had the third strongest growth last year in the United States. If you just look at the number of stores in Europe, then of course we still have big potential to grow in the United States.

IKEA has 50 stores in North America compared with 215 in Europe. It plans to open more than 10 outlets this year and will invest 2.5 billion euros in stores, factories, renewable energy and shopping centres.

GOING ONLINE

Founded in a shed in 1943 by Ingvar Kamprad to sell pens, wallets, watches and jewellery, IKEA now boasts more than 300 stores in 26 countries that attracted about 680 million people during the past year.

But while IKEA enjoys instant brand recognition - claiming that with a publication run of 212 million last year in 29 languages, its catalogue is the second most read publication after the Bible - it faces increased competition.

Companies such as German firm Home24, for example, are betting shoppers will increasingly look online for furniture as they are doing in growing numbers for products like fashion and food.

Research firm Euromonitor forecasts global e-commerce sales of home furnishings will grow almost 10 percent a year to $24 billion by 2015 from $20 billion in 2013.

While IKEA sells online in half its 26 markets, it has been relatively slow to embrace the Internet. "What we see so far is that the stores are very important for our customers," Agnefjall said. "They want to sit on the sofas, they want to open up the doors, they want to see the light from the lamp."

He said IKEA aims for online shopping in all its markets, though this would happen step-by-step.

The group added 3 new online markets last year and is also expanding the product range that can be bought over the Internet, Agnefjall said.

Overall sales in the year rose 3.1 percent to , with sales in comparable stores up by 1.8 percent. ($1 = 0.7313 euros) (Editing by Mark Heinrich)