Ikea, the world’s largest furniture retailer, has publicly disclosed its profits for the first time in an effort to rid itself of a reputation of being highly secretive.
The family owned, unlisted Swedish retailer said on Friday that the group’s net profit had risen 11.3 per cent to €2.5 billion ($3.4 billion) in the 2009 financial year compared with the previous year.
The group’s sales weathered the global economic downturn to rise 1.4 percent to €21.8 billion during the period. Sales recovered strongly in the 2010 financial year, rising 7.7 percent to €23.1 billion.
Net income has consistently stayed between 10 and 13 per cent of revenue over the past 10 years, according to the company. The proportion of sales in North America was 15 per cent last year, in Asia it was 6 per cent while sales in Europe dominated at 79 percent.
The company, which employs 127,000 employees, said it paid €384m in tax in 2009. Operating income rose 4.4 per cent to €2.77 billion while its assets totaled €37 billion.
The group has 280 stores in 26 countries and prides itself on producing smartly designed furniture and home furnishing and offering them at low prices. It has, however, faced criticism for closely guarding its financial performance and for an opaque ownership structure.
Mikael Ohlsson, Ikea’s chief executive, has made greater transparency for employees and customers one of his top priorities. He has been in the job for a year after succeeding long time chief executive Anders Dahlvig.
“Good profitability is needed to carry out our extensive growth program in existing as well as new markets, to give more people access to the Ikea range,” he said.
Ikea wants to expand in large emerging markets such as China, Russia and India. Mr Ohlsson has just returned from India, where he told the Financial Times that his group wanted to expand in Asia’s third-largest economy but would only do so if it could do it alone without a local partner. The group sources €500 million worth of supplies in India and could double this within three years, he said.
Mr Ohlsson said the group would publish a summary of its financial results on a yearly basis in the interest of greater transparency. It would also publish a document called “Welcome Inside”, explaining more about the company to its employees, suppliers and customers.
The decision to make more information available comes a year after the company’s business culture came under severe attack from a former employee. Johan Stenebo, a former senior manager close to the octogenarian founder Ingvar Kamprad, published a tell-all book called The truth about Ikea, which made allegations that the company was run by a sect allied to the family owner. He claimed the company ran an internal network of spies and that the Swedish management was highly contemptuous of foreigners.
The group’s profits were reinvested in existing and new Ikea stores, the company said in a statement. The company has opened 12 stores in 2010.