News in brief
Ikea Group laid out plans to accelerate its expansion in China and open its first store in India as the world’s largest furniture retailer seeks to boost sales by almost 50 per cent over the next four years. In China, where the company opened its first store almost two decades ago, sustained growth will enable an accelerated pace of expansion, Peter Agnefjaell, Ikea chief executive, said on Tuesday. Ikea plans to open its first outlet in India next year and aims to have 25 there by 2025, he said. The retailer has a goal for revenue of €50bn (£42bn) by 2020. Sales in the 12 months to August rose 7.1 per cent to €34.2bn (£29bn), it said on Tuesday.
The expansion in China and India, the world’s two most populous countries, may help the company achieve the target as sales growth stalls in Russia amid an economic slowdown.
Ikea will accelerate the pace of its Chinese expansion to five stores a year from the three it opened in the past year, Mr Agnefjaell said. It currently has 21 stores in the country. In India, the company has started construction of its first store in Hyderabad, has bought land in Mumbai and is also looking at cities such as Delhi and Bangalore. “India is one of the biggest growth markets we see going forward,” Mr Agnefjaell said. “But it of course hinges on a continued good economic development.” India’s gross domestic product rose 7.1 per cent in the second quarter, though that was the slowest pace of growth in more than a year. Ikea’s total store numbers in the 2017 financial year will be about the same or slightly higher than in the past year, Mr Agnefjaell said.
JD Sports reported first-half earnings growth that showed why it has surged past Mike Ashley’s Sports Direct among UK athletic-gear retailers. Underlying pretax profit jumped 66 per cent to £77.4m, the Bury-based company said on Tuesday, an outcome described as “astonishing” by independent retail analyst Nick Bubb. The shares rose as much as 8.3 per cent to a record high. While still smaller than Sports Direct in sales, JD Sports has sprinted past its larger rival in market capitalisation, now being valued at £2.8bn compared with its competitor’s £1.9bn. By stocking exclusive ranges from Adidas and Nike in bright, spacious outlets, JD has attracted a new breed of fashion-savvy customers as Sports Direct’s stack-it-high, sell-it-cheap strategy has fallen out of favour.