* 2011/12 net profit up 8 pct to 3.2 bln euro
* Sales up 9.5 pct to 27 bln euro
* CEO sees steady comparable sales growth
* Focus on Europe, N.A., Russia, China, India
By Anna Ringstrom
STOCKHOLM, Jan 23 IKEA Group, the world's
biggest furniture retailer, posted a record net profit on
Wednesday for the 2011/12 year, helped by sales and market share
growth as budget design enticed austerity-hit shoppers.
Net profit at the privately-held Swedish firm, known the
world over for low-price, self-assembly, flat-packed furniture,
rose 8 percent to 3.2 billion euros ($4.3 billion) in the 12
months through last August.
IKEA says it is relatively resilient to economic downturns
as these make cost conscious consumers turn to cheaper goods.
"Customers are getting more and more value conscious, which
makes IKEA a better choice," IKEA said in an annual summary.
Operating profit, however, shrank by 3 percent to 3.5
billion crowns as the group stuck to a strategy in recent years
to cut prices to customers, while costs for raw materials and
higher inventories increased.
IKEA has only in recent years started opening up the books
on its results.
Chief Executive Mikael Ohlsson told Reuters in an interview
that IKEA had decided to keep larger stocks than usual in the
year to improve product availability in stores.
Revenue grew by 9.5 percent to a record 27 billion euros,
with stores open a year or more accounting for a 4.6 percent
increase in local currencies, as the group gained share in all
Ohlsson said like-for-like sales growth in crisis-hit
Europe, where IKEA has the bulk of business, had stayed fairly
constant over the past few years.
He predicted group comparable sales around 5 percent in the
next few years. "We have been on that level the past 3-4 years.
In this economic climate it seems that the customers' value
consciousness, in combination with our lowering prices, allows
us to do about 5 percent."
EYE ON INDIA
Ohlsson said IKEA would this fiscal year open 5 to 6 stores,
all in existing markets, after 11 new openings in 2011/12.
IKEA last year unveiled plans to boost expansion to 25 new
stores per year - hopefully reached in 2015, Ohlsson said - and
double sales by 2020.
He said IKEA, after cutting prices by 0.8 percent in 2011/12
and 2.6 percent the year before, would continue to do so at
around those rates in coming years.
Germany is IKEA's biggest market, followed by the United
States. Ohlsson said new markets on the horizon were Serbia,
Croatia and South Korea, and Asia's third-biggest market, India.
India is expected to approve IKEA setting up stores after a
key investment board on Monday gave a go-ahead.
After India last year approved 100 percent foreign direct
investment in single-brand retail, IKEA posted plans to invest
1.5 billion crowns to open 25 stores there.
"I hope that long-term we will be strong in Europe, North
America, Russia, China and India. Because we will then have a
balance between mature markets and markets that are developing
strongly, where many many people create their homes in a new
way," Ohlsson said.
($1 = 0.7510 euros)
(Reporting by Anna Ringstrom; Editing by Tim Dobbyn)