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IKEA brand owner accelerates profit growth despite pandemic

STOCKHOLM, Nov 3 (Reuters) - The owner of furniture brand IKEA accelerated profit growth in the 12 months through August despite COVID-19 as shoppers stuck at home during the pandemic spent more on furnishing, and as lower wood prices helped boost margins.

Inter IKEA Group, a franchisor to store owners, said on Tuesday its pretax profit grew 13% to 2.02 billion euros ($2.36 billion). In the previous fiscal year, profit growth was 5%.

The firm, which generates the bulk of revenues from sales of goods to its franchisees, said in September franchisees’ sales shrank 4% in the year to 39.6 billion euros due to the pandemic and temporary store closures, although demand picked up after stores re-opened.

Inter IKEA Chief Financial Officer Martin van Dam told Reuters that sales in September and October had remained strong, rising year-on-year, after “a fantastic pick-up” in the June-August period. ($1 = 0.8552 euros) (Reporting by Anna Ringstrom, editing by Louise Heavens)