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IKEA franchisee reports 3.3% revenue growth to P42 billion

SWEDISH furniture maker IKEA’s franchisee in Southeast Asia and in Mexico reported a 3.3% turnover growth in its financial year ending August 2021 to generate P42.1 billion, driven by the new stores in Singapore and Mexico.

Ikano Retail is one of the 12 IKEA franchisees, which operates in Malaysia, Singapore, Thailand, and Mexico through 11 IKEA stores and five IKEA-anchored shopping centers.

It is also the firm behind the world’s largest IKEA store, IKEA Pasay City, which will launch soon in the Philippines.

“We lost 17% of our trading days, faced the worst supply challenges in our history and contended with limits on food operations and further restrictions,” Ikano Retail Chief Executive Officer Christian Rojkjaer said in a statement on Thursday.

However, Mr. Rojkjaer said e-commerce sales in Ikano’s markets grew by 57% to P7.7 billion.

For its financial year covering September 2020 to end-August 2021, visits to the IKEA websites by those within Ikano’s markets totaled 113 million. Of which, about a million are traced back to the Philippines.

Some 864,000 online orders were placed in Ikano’s current four markets, which is 64% higher year on year.

In Southeast Asia, Ikano said it also relaunched IKEA for Business and new IKEA Planning Studios were opened in Thailand and Singapore.

Ikano Centres, which are said to be meeting places, in Malaysia and Thailand also secured a healthy lease rate of 92%.

“We made sure that our centers continue to be meeting places for the many, offering a safe and fun day out as our economies open up and learn to live with COVID-19 (coronavirus disease 2019),” said Mr. Rojkjaer.

Ikano’s turnover in Malaysia declined by 13.9% year on year to P14.8 billion. Malaysia is home to four IKEA stores, IKEA Damansara, IKEA Cheras, IKEA Tebrau, and IKEA Batu Kawan.

Meanwhile, Singapore saw a 21% growth in revenues to P13.4 billion. It has three IKEA branches, including the newly opened small-format IKEA Jurong, IKEA Tampines, and IKEA Alexandra.

Thailand is home to three IKEA stores, namely: IKEA Bangna, IKEA Bang Yai, and IKEA Phuket. Turnover in the country for the fiscal year inched down by 3.3% to P12.1 billion.

Ikano opened its first store in Mexico City, IKEA Oceania, which accounted for P1.8 billion. It is the first in Latin America and recorded 15 million visits both in IKEA Oceania store and its website.

Ikano reported that 2.9 million are members of the IKEA Family loyalty club, of which 206,000 are from the Philippines.

Article was originally published in Business World and written by Keren Concepcion G. Valmonte