Ikea sees profits of €3bn amid Cork store speculation

Furniture company Ikea confirmed it is pursuing a growth agenda in Ireland but stopped short of confirming a new Cork store as it announced global profits of €3bn for the financial year.

A second store is being lined up by the Swedish behemoth in Carrigtwohill in east Cork to join its Ballymun, Belfast and Carrickmines operations.

It is believed Ikea has opted for a large site in the east Cork town, close to the rail line. The company remained reticent on the site’s location.

“Ikea is always looking for new opportunities in Ireland. We certainly have a growth agenda in Ireland but in terms of new stores, we’ve nothing to confirm at this time,” the company said.

Ikea reported a drop in annual operating profit due to the sale of several businesses as well as investments in areas such as the internet and logistics.

Profit was €3bn in the year to the end of August. The year before, when IKEA Group sold its product development, production and supply chain subsidiaries to brand owner Inter Ikea, it was €4.5bn. “The decrease in operating result was mainly driven by the loss of profit from the companies that were sold in the transaction, as well as the increased costs in Ikea Retail to support multi-channel growth and expansion,” Ikea Group said.

Its retail sales increased 4%, with online sales up 28% to account for a fifth of the total. In Germany, its biggest market, sales rose 2%.

Ikea stores worldwide are owned by 11 franchisees, of which Ikea Group is the biggest with 355 stores at the end of August. Franchisees pay 3% of their annual sales to Inter Ikea. Ikea Group this year opened a kitchen showroom in Stockholm and a bedroom store in Madrid, and plans include London and Copenhagen outlets.

The company had €150m in sales in Ireland in the last year, with a range of 10,000 products and has a worldwide turnover of €35bn.

Its decision to locate in Carrigtwohill came after business, political and local government figures made a strong pitch to Ikea in recent years as a viable destination for a new store. Mitchelstown, Charleville, Mallow, Fermoy, Ballincollig and Little Island were all mentioned as possible locations.

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