€2m a week spent at Irish Ikea store

Three million shoppers beat a path to Ikea’s store in Dublin last year to spend almost €2m per week on home furnishings.

However, the sales at Ikea’s Ballymun store of best-selling items, such as Billy bookcases, Expedit storage units, and Lack tables were not enough to prevent a 56% decrease in pre-tax profits to €2.97m in the 12 months to the end of Aug 31.

Accounts filed by Ikea Ireland Ltd to the Companies Office show revenues remained flat last year, with the store recording sales of €102.69m compared to €102.82m the previous year. Lower gross margins resulted in pre-tax profits falling from €6.8m to €2.9m.

The drop in profit was a result of tighter margins, with cost of sales increasing from €68.9m to €71.7m.

The figures show that operating profits dropped by 43%, from €8.8m to €5m. Interest payments totalling €2m reduced the firm’s profits to €2.9m.

Store manager Paul Reid confirmed Ikea it has increased turnover in the current year and revealed that it aims to open up a second outlet in Ireland. “Ikea has been looking at potential new store sites throughout the country. However, we have nothing to confirm at this point in time,” he said.

Mr Reid said the Dublin store will recruit an additional 30 temporary staff in the coming months.

Despite the continuing high unemployment levels in the country, Mr Reid said Ikea has “experienced difficulties recruiting at management level over the past 12 months”.

“Despite 2012 being a tough year for the Irish economy, we listened carefully to what our customers were telling us and invested in improvements to create a better shopping environment,” he said.

“For example, in the Markethall we have made it more inspirational and easier for customers to locate products. In the coming year, we will continue to show customers in Ireland that we understand the challenges they face every day in their homes, connecting our value for money offer with their needs and their dreams.”

The Dublin outlet — which is equivalent in space to five-and-a-half soccer pitches — contains 9,000 home furnishings, a 550-seat restaurant, food hall, crèche, and 1,850 parking spaces.

Last year, Ikea recorded global revenues of €27.5bn, employing 154,000 in 338 stores.