Saturday , February 23 2019

Ikea counts cost of Brexit as furniture prices soar

epa06260709 Customers wait for the opening IKEA store in Kaarst, Germany, 12 October 2017. After a construction phase of one and a half years the world's most sustainable store of the Swedish home furnishing company IKEA opens and reflects the theme of sustainability in all its facets - from the use of environmentally friendly techniques and an exceptional architectural concept to regional service providers and local cooperations.  EPA-EFE/SASCHA STEINBACH


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 percent in the year through August, the company said in a statement on Tuesday. That increase was driven by the drop in sterling after last year’s vote to leave the European Union.
“To keep our range accessible and affordable for the many, we absorbed most of these costs, increasing prices by just 3.6 percent,” Ikea’s UK and Ireland head, Gillian Drakeford, said in the statement.
British retailers such as Tesco Plc and
J Sainsbury Plc have been cutting thousands of jobs in response to rising costs but have provided few details.
Fashion retailer Next Plc said the pound was worth 14 percent 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 percent.
In the UK, Ikea’s sales rose by
5.8 percent, boosted by two new store openings. Overall, Ikea’s annual retail sales rose 3.6 percent to $39.8 billion, driven by growth in China, Germany, Canada and Poland.

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