Ikea’s new CEO Juvencio Maeztu is looking to inform me in regards to the Ingka Group’s newest earnings (that’s the dad or mum firm behind Ikea). Because it seems, there are worse fates than an organization making rather less cash than it did final 12 months.
In August, Ingka Group introduced that its long-time CEO Jesper Brodin can be stepping down, as Maeztu took the position. An economist by coaching, Maeztu has labored on the firm for greater than 25 years, and brings a strong worldwide perspective to the place—having began as a retailer supervisor in Madrid, earlier than ultimately taking up as CEO of Ikea India. For the previous seven years, he’s served as deputy CEO and CFO below Brodin.
We spoke across the launch of Ingka’s 2025 monetary earnings, which Maeztu characterizes to me as “largely flat.” Income is down 0.9% (to €41.5 billion) as the corporate fights inflation to maintain costs low. Tariffs have but to totally enter the equation in these figures—however Trump’s 50% tariffs on furniture introduced in September have been vital sufficient that Ikea raised costs to assist offset them.
On the brighter facet, retailer site visitors was up 1.3%, on-line gross sales have been up 4.6%, and total merchandise gross sales grew 1.6%.
In our dialog—representing a few of Maetzu’s first public feedback since being appointed to the place—he detailed his greatest priorities for the corporate, whereas addressing the challenges of working a budget-friendly furnishings enterprise in a risky international financial system.
Now that you just’re formally CEO, what’s your fast focus for Ikea?
The announcement was made mid-August, and the final three months I’ve been touring round many international locations to be taught in regards to the actuality from the store ground, after which speaking with shoppers and colleagues and coworkers. And that has cemented three issues which can be fairly essential to ship to the care vision (that caring for folks and the planet is core to Ikea’s goal). As a result of we is not going to change the care imaginative and prescient. We is not going to change the enterprise thought.
I’ll preserve placing a variety of give attention to progress; not progress solely in mature markets or extra European-based progress, however many markets, U.S. included, and India and China. Development is a strategy to be extra current in houses. So progress is just not linked with revenue to the shareholder, it’s linked with affordability for the many individuals. You might say we are able to by no means obtain our imaginative and prescient if we don’t develop. So we have now to considerably develop.
The second factor is to double down . . . on the necessity for price transformation . . . and the necessity to preserve prices low. As a result of the most effective body of low value is a low price. You can’t be a low-price firm in case you are not a low-cost firm. And I’ll double down on the resilience of the corporate.
After which the third one is simplicity. So usually, large firms like us begin to be bureaucratic, and from the management perspective, we have now to discover ways to lead the corporate in a extra agile method, sooner resolution making, much less layers, and on the identical time, extra agility within the resolution making.
We now have a very good model, we have now a very good omni channel capabilities at this time. We now have wonderful cultural values with excessive coworker engagement, tremendous excessive proper now. After which on the identical time, we have now a robust steadiness sheet. So you possibly can say we have now a variety of belongings that permit us to actually double down within the progress, in the fee transformation, and the simplicity.
Trying over your earnings, the place is that income dip coming from?
We’re promoting extra portions at a lower cost.
If I take one step again, we measure efficiency in 4 dimensions. So one of many 4 is a monetary dimension, and I’ll touch upon that. However the different three are the local weather dimension (we name it “higher planet” for all), the social dimension (“higher life” for folks), and the patron dimension (“higher houses” for the client).
At this time, as we launch the monetary consequence. It’s virtually flat income—0.9% decrease, virtually flat, which is €41.5 billion (roughly $47.9 billion). Nonetheless, what’s taking place is strictly what we needed to occur, as a result of our bodily visitation is rising, our on-line visitation is rising, and our [sold] portions are rising.
So principally, [revenue is down] as a result of we have now saved low costs. However then we’re very glad [about] the underlying enterprise.
For us, progress is just not a mechanism to pay extra dividends to the shareholder. As a result of we’re owned by a basis. So 85% of the revenue stays within the firm, and 15% is the dividend to assist the charitable actions. . . . We usually say revenue provides us assets to maintain investing sooner or later and low value.
How are common inflation and different elements affecting your provide chain?
The general provide chain is sort of stabilized now. We got here from many disruptions within the final 12 months, and that disruption remains to be taking place on the finish of this fiscal 12 months, however now it’s fairly secure. So we’re not growing costs generally.
We continually hear that bodily retail is challenged, or on the point of collapse. However I seen Ingka facilities—your malls, principally—had an inflow of latest foot site visitors this 12 months. I’m interested by your tackle large-scale retail proper now.
Folks nonetheless have the necessity to socialize. Folks nonetheless have the necessity to exit. That’s why it’s essential that we name it a gathering place—not essentially a shopping mall—and whenever you go to our assembly place it’s a strategy to join with the communities . . . to create site visitors with engagement and meals and occasions. So in a world that’s omnichannel and on-line, folks nonetheless have the necessity to socialize. In order that’s why we preserve seeing extra guests within the buying heart and extra guests within the Ikea bodily retailer.
Then what is actually essential is that the customer nonetheless finds a very good worth for cash. That’s why we don’t have an excessive amount of in low cost exercise on Black Friday. We’re extra attempting to have on a regular basis low costs. And that’s why we preserve investing in that. So in some way clients acknowledge that, you provide them a enjoyable day trip within the assembly place, buying heart, the Ikea retailer, and then you definitely preserve costs low. You realize, price of dwelling is growing, not solely in U.S., however wherever on the planet.
The price of housing is growing everywhere in the world, so [our] care imaginative and prescient—higher life at dwelling by offering extra reasonably priced dwelling furnishings—it’s not solely timeless. It’s much more related at this time than some years in the past.
Now that they’ve stabilized a bit, how do you see the influence of tariffs affecting Ikea?
I feel the entry level is just not solely tariffs. The entry level is that firms who function globally, like us, reside in a extra advanced world, in a extra risky world. Generally due to tariffs, generally due to currencies, generally due to the limitation in international commerce or geopolitics. However we have to be taught as an organization, how can we construct the resilience to maintain navigating the circumstances?
And that’s why we distinguish what’s the brief time period and the long run. And for us, the long run is to construct the resilience within the firm, and the low price within the firm, that may preserve us within the low value agenda.
After which, after all, we at all times attempt to mitigate the influence—not essentially when we have now to extend costs due to tariffs—usually . . . we attempt to take up the influence. However I’d say it’s not solely tariffs in U.S. There are numerous explanation why international commerce is a bit risky, however in the long run, we are going to continue to grow. In Europe, within the U.S., in China and India, everywhere in the world.
This dialog has been edited for size and readability.
