Covid pandemic sends profits tumbling at IKEA's Irish store

The furniture giant saw average weekly revenues of €3.39m
Covid pandemic sends profits tumbling at IKEA's Irish store

Denise and Stephen Collins from Castleknock with their purchases at Ikea when it reopened in May. Picture Colin Keegan, Collins Dublin

The impact of the Covid-19 pandemic sent pre-tax profits tumbling by 67pc at IKEA’s Irish store and online operations last year to €3.69m.

The furnishing giant’s Dublin store in Ballymun is one of the group’s most successful worldwide but the pandemic resulted in revenues at Ikea Ireland Ltd reducing by 13pc from €203.53m to €176.6m in the 12 months to the end of August last. Ikea also operates an order and collect store in Carrickmines. The figures for last year equate to average weekly revenues of €3.39m.

However, the drop in revenues at Ikea Ireland Ltd would have been far greater but for the growth in online sales with e-commerce operations accounting for 24pc of sales last year compared to 16pc in 2019.

The 24 per cent in e-commerce sales translates into revenues of €42.29m for the year - compared to €32.56m in online sales in 2019.

The firm’s current financial year to the end of August has been interrupted by two further lockdowns and the directors state that the company’s sales results have significantly improved compared to the first lockdown “and we expect a less than 5 per cent deviation from our sales targets for 2021 based on our Store and Order and Collection Point re-opening to customers at the end of May 2021”.

The directors state that prior to the Covid-19 lockdown in March 2020, the first six months of the year “headed off to a great start and the company had been enjoying a four per cent year on year growth in turnover mainly fuelled by increased e-commerce activity”.

The directors state that in the second half of its 2020 financial year, the business was “severely impacted” by Covid-19. The company said it did not avail of Government Covid-19 wage subsidy schemes and paid all workers throughout 2020. The accounts show that the company’s staff costs last year reduced by 22.7pc from €22.86m to €17.66m.

Numbers employed decreased only marginally from 699 to 695.

The directors reveal that in response to Brexit, the company took the decision to switch its Distribution Centre supply from the UK to Belgium prior to December 31st 2020. They said the central fulfilment of customer orders though - mainly for the online business - is still done from the UK.

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