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Family business roundup: Growth for Ikea, Swatch and Richemont, Metro and Douglas soldier on

The latest results show 2012 was a good year for many European family businesses; secretive Ikea published strong results, and luxury groups Richemont, Swatch and Remy Cointreau also reported encouraging figures. But German-based Metro Group and Douglas Holding had to fight for growth in the household goods market.

The latest results show 2012 was a good year for many European family businesses; secretive Ikea published strong results, and luxury groups Richemont, Swatch and Remy Cointreau also reported encouraging figures. But German-based Metro Group and Douglas Holding had to fight for growth in the household goods market.

Ikea
Swedish giant Ikea Group published its 2012 financial results on 23 January – only the fourth time it has published results in its 70-year history.

The Kamprad family's furniture group saw revenues increase by 7.1% to €27 billion, while net profit grew 8% to €3.2 billion. It put its success down to increased sales, particularly in China and Russia, and a company-wide focus on reducing costs.

Non-family president and chief executive Mikael Ohlsson said in a statement: "In FY12, we managed to grow in most markets. The markets where we grew most were China, Russia and Poland, closely followed by the US and Germany."

A large proportion of its profits will be reinvested into product development and renewable energy, according to the group. In the statement it said it already produced “renewable energy equivalent to a third of its total consumption". Ikea, which won the CampdenFB sustainable family business award last year, has committed to investing €1.5 billion in renewable energy between now and 2020.

The flat-pack retailer is also planning to focus on expansion in 2013, including breaking into the Indian market.

Douglas Holding
In Germany, Douglas Holding – controlled by the Kreke family – reported "satisfactory" results for the 2011/2012 financial year, with revenues rising 1.7% to €3.44 billion.

The results – published on 22 January – are the first results since the Kreke family organised a financial restructure of the group with Advent International in November 2012. The group's perfume, jewellery and confectionary subsidiaries performed well but the figures were undermined by high restructuring costs in its struggling book division.

Third-gen Henning Kreke, president and chief executive of Douglas, said in a statement: "All in all, we are satisfied with the sales trend in the 2011/12 fiscal year."

The Kreke family and Advent International are also in the process of squeezing out the last minority shareholders of the company through a mandatory share buyback scheme. Douglas's minority shareholders collectively have a 5% stake in the business.

Richemont
In Switzerland, the Rupert family's luxury group Richemont has reported relatively strong results for the nine months to the end of December 2012. Richemont’s sales grew 9% to €8 billion from €6.8 billion, over the nine-month period.


In a results statement published on 21 January, the group said its performance was driven by solid growth in the US due to the weakening euro against the dollar over the first half of 2012.

However, Richemont – which counts jewellers Cartier and Van Cleef & Arpels and fashion house Chloe among its luxury brands – said the growth in the US and "robust" jewellery sales elsewhere were offset by weak wholesale figures. Cautious retailer partners, particularly of Richemont's watch brands, were reluctant to place large orders. The group cited its own stores as the principal drivers of growth.

Remy Cointreau
Elsewhere, Remy Cointreau, controlled by the Heriard Dubreuil family, reported a 7.9% rise in revenues to €964.4 million for the nine-month period ending December 2012.

However, the figure fell a long way short of 2011's growth of 22.9%. Remy Cointreau blamed the fall on weaker Asian demand, which it relies heavily on. In a statement, the family business said: "Weaker growth was reported for the third quarter due to the later date of the Chinese New Year, resulting in a technical decrease in shipments."

The drop in sales in Asia was mitigated by high demand for Remy Cointreau's Scotch whiskies and Cointreau in the US.

Metro Group
It was a tough year for Metro Group, which published its end-of-year results on 16 January. It divested its Makro UK and Saturn France chains in 2012, and announced recently it will be discontinuing operations of its Media-Saturn electrical goods chain in China.

Despite this, the German conglomerate – controlled by Otto Beisheim and the Haniel and Schmidt-Ruthenbeck families – announced a sales increase of 2.3% to €66.7 billion, a figure driven by strong online and domestic sales in the fourth quarter.

Metro chairman Olaf Koch said in a statement: "[The] financial year 2012 was marked by rising unemployment in Europe and increased measures toward consolidation among European governments to curb the sovereign debt crisis. The resulting consumer reticence had a negative impact on our business development. Taking into account these factors, the sales development was satisfactory."

Swatch Group
In contrast, it was a good year for the Hayek family's Swatch Group; it had gross sales of CHF8.1 billion (€6.6 billion) in 2012 – an increase of 14% on the previous year.

Across the group, the watches and jewellery division saw growth of 15.6% – notably due to high demand in Asia. On the other hand, sales in the electronics systems arm – manufacturing precision electronic components for other electronics brands – fell by 7.4%. The drop was caused by increased competition and unfavourable exchange rates, according to Swatch.

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