IKEA’s annual sales fell for a second consecutive year, it reported on Thursday, as the budget furniture retailer stuck to a strategy of cutting prices to attract cash-strapped consumers and gain market share in a fiercely competitive market.
A worker walks past the façade of an IKEA store in Barcelona, Spain, April 26, 2024 – REUTERS/ Nacho Doce/ File Photo
Having hiked prices during the pandemic due to supply chain disruptions, the world’s biggest furniture retailer has cut prices by 10% on average over the past two years as high inflation and weak housing markets worldwide dented consumers’ demand for furniture and homeware.
Global IKEA retail sales in the 2025 financial year- which ended on August 31- fell 1%, or 0.3% adjusted for currency effects, to 44.6 billion euros ($51.9 billion). The total number of products sold, however, was up 3%, with customer numbers and store visits also up.
“One of the reasons we could take that decision was the fact that we are not on the stock exchange- we can be very long term together with our franchisees and decide that it’s most important right now to have better prices,” Jon Abrahamsson Ring, CEO of IKEA franchisor Inter IKEA, told Reuters. “We do that because we see that people in all our 63 markets, their wallets are thinner right now and we see that consumer confidence for many years has gone down.”
IKEA has not yet raised prices in the US despite higher tariffs on imports increasing its costs, Abrahamsson Ring said. IKEA is trying to absorb the extra cost, he added, though he left the door open to possible future price increases. “We have not come to that point yet, but it will maybe eventually come,” he said.
IKEA competes in the US with Wayfair and Walmart, but more of its furniture is made in factories in Europe, giving it a slight advantage over retailers relying on imports from China which face a higher tariff rate.
“The agreement that today exists between the European Union and the US… that at least gives us good predictability and we want that to stay consistent,” said Abrahamsson Ring.
Ingka Group, the biggest IKEA franchisee which owns stores in 31 markets, also reported on Thursday its lowest annual sales since 2021, down 1.6% at 39 billion euros due to price cuts, but said quantities sold were up 1.6%.
Ingka CEO Jesper Brodin told Reuters he was cautiously optimistic about consumer spending picking up again. “The impact of falling inflation and falling interest rates… it usually takes a while before people open their wallets. We are starting to see the tendencies towards that,” he said, adding that uncertainty over trade and conflict around the world made it difficult to predict.
The sale of the fashion collection belonging to Paris socialite, filmmaker, and former runway star Farida Khelfa has raised €330,000 at auction, half of it for charity, confirming how buoyant the vintage market remains.
Pieces by Azzedine Alaïa and the prices they fetched at the auction – Maurice Auction
Organised by Maurice Auction, a Paris firm focusing on art and luxury, the sale, entitled Garde-Robe Iconique de Farida Khelfa, raked in €332,343.
A notably elegant figure, Khelfa ran away from her family in Lyons at 15 to begin a career in modelling in Paris, where she walked in shows by such legends as Azzedine Alaïa and Jean-Paul Gaultier. In later life she was named brand ambassador for Schiaparelli. Designs by all three fashion houses made up the majority of the auction which also included creations by Saint Laurent, Jean Charles de Castelbajac, Prada, Pierre Cardin, and Christian Louboutin.
Sold online, these personal archives of Farida came to approximately 200 pieces, comprising outfits, shoes, and accessories worn by the model in her storied career. During this, Khelfa was also the witness at the 2008 wedding of Carla Bruni to then French president Nicolas Sarkozy.
“I thank the buyers: their gesture shows as much elegance as generosity. These resonate particularly well with RIACE, and I am sincerely grateful to them,” said Farida after the auction, half of whose profits will be donated to the RIACE Fund, engaged in solidarity actions.
The Alaïa lots sparked intense competition, achieving a world record for an Alaïa piece from a private collection. A 1996 ensemble of a flared skirt and gilet by Alaïa reached €50,700, while an epic calfskin Alaïa trench printed in leopard went for €27,300.
The sale attracted international collectors, another confirmation of Farida Khelfa’s status and the market’s interest in these archives.
Clothes destined for Europe could soon require digital passports to prove their green credentials, opening a new era of transparency for the world’s $1.7-trillion fashion industry.
Digital product passports could transform the textile industry in Bangladesh – Shutterstock
Consumers will be able to scan QR codes or electronic tags to see the garments’ digital product passports (DPPs) and check if a fashion brand’s green claims are true. The passports will tell consumers what the clothes are made of, how much energy, water and chemicals were used to make them, and who took part in each stage of their production.
Textile suppliers from Bangladesh, the world’s second largest apparel exporter, may need to implement an initial version of the passport as early as 2027, according to analysis by the European Parliamentary Research Service.
“As consumers place a higher premium on sustainability and transparency, the digital product passport could be a key tool to provide granular records about the environmental footprint of each piece of cloth- starting from the cotton field to finished garment,” said Asif Ibrahim, vice chairman of the Dhaka-based apparel manufacturing company Newage Group of Industries. But Ibrahim said smaller manufacturers were far from ready to fulfil the stringent, new European Union (EU) needs, which aim to stop manufacturers overclaiming their green credentials.
From payroll information to material certifications, fashion makers already provide reams of data about labour and environmental standards to meet buyers’ requirements and audits. Yet a 2023 report by the British-based NGO Greenpeace said some brands and suppliers had misled consumers- for instance highlighting their recycling record, even if most of the ‘recycled’ fibre came from plastic bottles not textile scraps.
“Providing authentic and traceable data from across the supply chain is key to stop the problem of greenwashing,” said Rezwan Ahmed, CEO of Aus Bangla Jutex Ltd, a company producing bags, caps and aprons from recycled and organic cotton.
Bangladeshi suppliers have already started working with technology companies to get ready for the changes. Ahmed has partnered with Aware, a Dutch firm working with several fashion suppliers, using decentralised blockchain to record relevant data as fabric becomes a finished garment.
A manufacturer inputs key pieces of data- perhaps yarn count, water consumption or colour- and Aware’s blockchain-based platform then generates a QR code for consumers. “The manufacturers will have control over what they disclose to their brands and consumers- as we want to give the manufacturers ownership of data,” said Md. Muyeed Hasan, Bangladesh country manager at Aware.
Cotton ginners, washers and dye factories, as well as the makers of finished garments, will all upload any relevant data and certificates to their digital profiles, then must add details about each batch of production in real time. Claims about energy and water usage will be verified by third parties, he told the Thomson Reuters Foundation.
The passport may require Bangladesh’s smaller garment makers to upgrade their hardware and software capacity as well as how they manage their data, said Ibrahim from the Newage Group. Smaller manufacturers make up a large share of Bangladesh’s roughly 3,320 export-oriented apparel factories, according to Mapped in Bangladesh, a project developed by BRAC University in the Bangladeshi capital.
British-based DigiProdPass has partnered with Bangladesh’s garment manufacturers’ association BGMEA to help smaller producers meet the new passport requirements. Salauddin Sohag, managing director of DigiProdPass, said his company is rolling out pilot studies and plans to train smaller businesses to help them adapt.
“Suppliers will need support from global fashion brands and development organisations to upgrade their capacity- while the government should incentivise the early adopters,” said Ibrahim.
Fine jewellery brand Senco Gold & Diamonds has expanded its men’s offering and launched new brand ‘Aham,’ designed to cater to modern Indian grooms with a range of gold, diamond, and platinum options.
A look from Senco Gold & Diamonds’ new brand Aham – Senco Gold & Diamonds – Facebook
“Aham draws inspiration from the evolving equal relationships of modern Indian couples where the groom’s style is now as significant as the bride’s,” said Senco Gold & Diamonds’ director and head of marketing and designs Joita Sen in a press release. “What we’ve seen in most Indian weddings so far is the groom looking on indulgently as his better half glitters in her wedding jewellery. With Aham, we wanted to change that narrative and have the couple dazzle equally in their Senco adornments! Each piece of this collection allows the groom the freedom to express his personal style, most naturally and effortlessly.”
Now available in Senco Gold & Diamonds’ pan-India brick-and-mortar stores, online, and on the Senco shopping app, Aham’s ‘Wedding Season Collection’ presents a contemporary take on traditional wedding jewellery. The label’s maiden collection features over 800 designs including kadas, platinum wristwear, diamond-set rings, and more minimalist cufflinks, along with a selection of fusion pieces in two-tone styles.
Senco Gold & Diamonds’ parent company Senco Gold Limited was incorporated in Kolkata in 1994, according to its website. The business counts over 175 stores in India.
Politics8 years ago