Ikea one of few re­tail­ers to quan­tify cost of Brexit

The Irish Times - Business - - BUSINESS NEWS -

Costs at Ikea UK, which is heav­ily re­liant on im­ports, jumped by 13.7 per cent

Ikea, the Swedish flat-pack fur­ni­ture em­pire, has be­come one of the few re­tail­ers to quan­tify the fi­nan­cial ef­fects of Brexit.

Costs at Ikea UK, which is heav­ily re­liant on im­ports, jumped by 13.7 per cent in the year through Au­gust, the com­pany said.

That in­crease was driven by the drop in ster­ling af­ter last year’s vote to leave the EU.

“To keep our range ac­ces­si­ble and af­ford­able for the many, we ab­sorbed most of these costs, in­creas­ing prices by just 3.6 per cent,” Ikea’s UK and Ire­land head, Gil­lian Drake­ford, said.

Cut­ting jobs

Bri­tish re­tail­ers such as Tesco and J Sains­bury have been cut­ting thou­sands of jobs in re­sponse to ris­ing costs but have pro­vided few de­tails. Fash­ion re­tailer Next said the pound was worth 14 per cent less when it was sourc­ing gar­ments for this year’s au­tumn-win­ter col­lec­tion.

But ex­cess man­u­fac­tur­ing ca­pac­ity en­abled the com­pany to strike bet­ter deals with sup­pli­ers and limit price rises in its shops to 4 per cent.

In the UK, Ikea’s sales rose by 5.8 per cent, boosted by two new store open­ings. Over­all, Ikea’s an­nual re­tail sales rose 3.6 per cent to €34.1 bil­lion, driven by growth in China, Ger­many, Canada and Poland.

In Bri­tain, Ikea’s sales rose by 5.8 per cent, boosted by two new store open­ings. Over­all, Ikea’s an­nual re­tail sales rose 3.6 per cent to €34.1 bil­lion.

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