Ikea India, a leading Swedish furniture and home furnishing retailer, expects to achieve operational profitability in a couple of years, Susanne Pulverer, Ikea India CEO and Chief Sustainability Officer, said on Friday.
In a media interaction, she stated that after overcoming the impacts of COVID-19, subsequent inflation hikes, and disruptions in supply chains and raw materials, Ikea is preparing for the next phase while focusing on stabilisation and affordability.
“It (operational profitability) will take a couple of years, but we have a very clear plan to achieve it,” she said.
Ikea India reported a widening of losses to Rs 1,299.4 crore in FY24, according to an RoC filing by the company, a subsidiary of Netherlands-based Ingka Holdings. Its revenue from operations stood at Rs 1,809.8 crore, marking a 4.5 per cent increase in the financial year ending March 31, 2024, according to financial data accessed through the business intelligence platform Tofler.
According to the company, the rise in losses is primarily due to investments in expansion and omnichannel growth.
“We are moving according to plan and progressing towards profitability. There is a structured approach to achieving this, based on several initiatives. One key aspect is maintaining low costs in everything we do, which is part of our core value. We aim to enhance efficiency in our operations, develop more cost-effective touchpoints, and explore ways to reduce expenses,” she added.
Susanne further stated that online sales, which account for 30 per cent of total sales, are growing faster than offline sales.
The Rs 10,500 crore investment Ikea committed when it first entered India was used to establish stores in Hyderabad, Navi Mumbai, and Bangalore, as well as a city store in Worli (Mumbai) and another in a Mumbai mall, which was later closed.
Additionally, two Ikea-anchored Ingka Centres projects are ongoing in Gurugram and Noida, set to open in the coming years, she explained. The Gurugram project has advanced significantly, and the shopping center’s structure will soon be ready. She added that it is expected to be operational by 2026. Meanwhile, the Noida project is still in its early stages.
The Noida project, which includes offices, a hotel, a shopping centre, and an integrated Ikea store, is larger in scale than the Gurugram project.
Ikea India currently has a workforce of nearly 3,000 employees and sources 30 per cent of its materials locally. The company has over 180 million visitors across online and offline platforms, with more than 2.5 million members in its ‘Ikea Family’ community.
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