Ikea pulls out of Preston store as profits nosedive

The furniture giant, which had obtained planning permission to build what would have been its second-biggest store in the UK, said the store was “no longer viable”.

The U-turn came as Ikea reported a near 40% drop in pre-tax profits to £86.6m for the year to August 31, 2017, according to a Companies House filing.  

It attributed the decline to higher wage costs and investment in its new stores and website.

Ikea has opened several superstores in quick succession, including in Reading, Sheffield and Exeter, as well as a handful of smaller order-and-collection points.

It is also planning new stores, one in Greenwich and another near Brighton.

As previously reported, Ikea sales rose 6% to £1.8bn during the period.

Commenting on the decision to abandon its Preston store, Ikea UK property manager Richard Rands said: “Our decision is due to increased development costs and delays outside of Ikea’s control, which no longer make this location viable.

“We will continue to look for new sites and opportunities in this region.”

Ikea founder Ingvar Kamprad died in January this year.

Earlier this week, the retailer said its UK boss Gillian Drakeford will stand down in June and be succeeded by her deputy, Javier Quiñones.