STOCKHOLM Sales at Sweden's IKEA rose 7 percent in its latest financial year, a Swedish newspaper reported on Wednesday, quoting its top executive as saying the global economic slowdown is weighing on the retailer.
Sales at the world's biggest furniture retailer rose to 21.2 billion euros ($30 billion) in the year ended Aug 31, business daily Dagens Industri reported. Sales in the prior year were 19.8 billion euros, according to IKEA's Internet site.
The firm, founded by Swede Ingvar Kamprad in 1943, is unlisted, and a spokeswoman declined to comment on the figures for the latest year.
Despite the rising sales, the global slowdown is having an effect on the firm, which has built its success on a concept of cheap and easy-to-assemble furniture. Sales growth was half that of the 2006-2007 period.
"Obviously we are not immune to such a significant worsening of the economic situation," Dagens Industri quoted Chief Executive Anders Dahlvig as saying, although he told the newspaper that excluding currency effects growth was 10 percent.
"Furthermore, the business cycle is particularly weak in several of our biggest markets, like Germany, the United States and England," Dahlvig said.
According to IKEA's Internet site, Germany accounted for 16 percent of sales in the 2007 fiscal year, ahead of the United States at 10 percent and Britain and France at 9 percent each.
Dahlvig declined to say in the article how much profit IKEA made in the past financial year, but said the firm's strong finances meant it could continue to invest and expand even in a weaker business environment.
Expansion, however, will slow.
"We plan to ease the pace of new store establishment from 2010 and from then the number of new stores will fall to 10-15 per year from 20-25," Dahlvig said.
IKEA opened 22 new warehouse stores in its latest financial year.
(Editing by Sue Thomas)