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- IKEA is preparing for potential U.S. tariffs under President-elect Donald Trump's presidency.
- Inter IKEA has improved its supply chain but remains vulnerable in the U.S.
- Only 10% of IKEA's U.S. products are locally made, increasing tariff impact.
LONDON — IKEA has learned from recent supply chain disruptions and is well prepared for potential trade barriers, the owner of the world's biggest furniture brand said on Friday as companies seek to ready themselves for tariffs under Donald Trump's presidency.
Inter IKEA produces IKEA furniture and franchises the brand to retailers around the world. The biggest IKEA franchisee, Ingka Group, last year announced a $2.14 billion investment to expand significantly in the United States.
Trump has said he would impose tariffs of 10% on all imports to the U.S., and tariffs of 60% on imports from China.
"We have worked a lot on making our supply chain more responsive to different changes, including different trade barriers, etc., so I think we are better equipped than we have been ever before, (but) then of course we are not immune to changes," Inter IKEA's chief financial officer Henrik Elm told Reuters on Friday.
Inter IKEA is more reliant on imports in the U.S. than in other regions of the world, making it more vulnerable to tariffs.
Of the products it sells in the U.S., only 10% are made in the region, Inter IKEA said. It did not say where the majority of products sold there are sourced from.
In Europe, 70% of what it sells is sourced in Europe, while 80% of what it sells in China is sourced from China.
Inter IKEA's top five sourcing markets globally are Poland, China, Italy, Lithuania and Germany, the company said, declining to give a breakdown of the percentage sourced from each country.
Inter IKEA on Friday reported annual revenue fell 8.9% to 26.5 billion euros after it cut prices this year. Its profit increased, though, thanks to lower interest payments and shoppers buying bigger quantities of lower-priced products.
