Ikea Group, the Swedish home goods retailer currently residing in 298 blue-boxed stores in 26 countries, wants to expand. Just don’t rush it.
The company opened 11 new stores in nine countries in its fiscal year ended Aug. 31 – buying the land and buildings instead of renting in most cases. It also added 8,000 workers, bringing its headcount to 139,000 employees.
And that growth pace is just fine for now, Ikea said in its annual report.
“We want to continue to grow,” company executives wrote. “But we will only grow in a balanced way, by expanding from our own resources. In other words, earning the money before we spend it.”
[Updated, 12:55 p.m., Jan. 23: The company said it only expects to open five or six stores in the current fiscal year.]
Tell that to McDonald’s, which said Wednesday that it plans to open up as many as 1,600 new branches this year. Starbucks announced this fall that it will open 1,300 new stores worldwide in the current fiscal year.
But Ikea’s relatively small size may help keep its balance sheet in line. For the fiscal year, the company said its revenue rose 9.5% to 27.6 billion euros, or $36.8 billion. Adjusted same store sales in existing branches rose 4.6% due to higher traffic and customer enthusiasm over lower prices.
IKEA’s profit rose 8% to 3.2 billion euros, or $4.3 billion.
The chain experienced the most growth in countries such as China, Russia and Poland. But Germany and the U.S., where same store sales rose 8%, were close behind.
Thirteen American stores were remodeled, with 17 more following suit in the current fiscal year. The company also hopes to have renewable energy-generating solar photovoltaic systems at 39 of its 44 U.S. facilities. Now, 31 electric vehicle charging stations are in operation at nine Ikea stores in the western part of the country.