IKEA Opens Up
By its own admission, "2009 was a tough year" for
IKEA. The interesting aspect of that admission is that it comes in the furniture
retailer’s first ever financial report.
The privately-held company decided to
publish the document as part of a process to become more transparent to stakeholders
including its employees, customers and vendors. IKEA is not only looking to
provide financial results but to share how it is using revenues and profits
both to run the company and fund its more altruistic ventures, as well.
Lucht, senior consultant at Verdict Research, told The Wall Street
Journal that it was "a good move" for IKEA to be more open."They
have a fantastic reputation for the charity work they do that goes hand-in-hand
with their leading position," he said.
According to the report, IKEA grew
revenues by 3.1 percent in 2009. The increase was a result of opening 15 new
stores during the year. Same-store numbers for the company were actually down
1.1 percent. Profits for the company were up 11 percent in 2009 compared to
the previous year.
Discussion Question: What advantages and/or disadvantages are there to
IKEA’s financial transparency?
- IKEA Group releases first Yearly Summary – IKEA Group
Lifts Lid on Full-Year Earnings – The Wall Street Journal