IKEA makes push for growth
IKEA, whose stadium-sized furniture stores draw shoppers from miles around, is making an online push.
New York: IKEA, whose stadium-sized furniture stores draw shoppers from miles around, is making an online push.
The CEO of IKEA Group, the world's largest furniture chain, is pushing for sales growth, while making its ready-to-assemble furniture more accessible to shoppers increasingly buying online.
Peter Agnefjail, IKEA's president and CEO, told The Associated Press in a phone interview Friday that he remains focused on reaching sales of USD 63.7 billion by 2020, a goal set a couple years ago.
And he says he's not unnerved by the recent investor fears about another recession in Europe.
He plans to reach that goal by opening more stores, while making the locations more inviting and expanding its online business around the globe.
"We are optimistic about what we see," said Agnefjail, an 18-year IKEA veteran who took over the reins from Mikael Ohlsson in September 2013. "Unemployment is stabilizing in many markets."
But Agnefjail acknowledged the Swedish retailer, which operates 315 massive stores around the globe, has to go where shoppers are heading.
"Customers still would like to sit in the sofa and feel how comfortable it is," he said. But he said they also mix up online and offline shopping.
"What we do see is that customers are more walking across channels in a way that is very seamless."
The focus marks another chapter in the history of IKEA, founded by Ingvar Kamprad in 1943 as a mail-order company whose stores now drew 716 million visitors in its last fiscal year.
IKEA is starting to see a recovery in many of its markets, particularly its European business, which accounts for about 70 per cent of total sales and has been hampered by an economic slowdown there.
But IKEA also needs to offer more convenience to shoppers as it faces increasing competition here and abroad. Abroad, there are players like Home24, a German-based online furniture startup looking to expand.
In the US, IKEA faces fragmented competition from different types of chains from discounters like Wal-Mart and Target to chains like Crate and Barrel at the higher end.
"IKEA is still the low-priced go-to furniture place," said Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors. But he noted everyone is trying to take a bite out of IKEA's business.
Last month, IKEA announced 5.9 per cent revenue growth in the year ended Aug 31 to USD 36.6.
That's an increased pace from the 3.1 per cent increase in the prior year.IKEA also continues to focus on cutting prices on big-ticket items as it seeks to outfit more homes around the globe.