IKEA sees record sales in spite of downturn-paper

STOCKHOLM, June 23 (Reuters) - IKEA, the world's top furniture retailer, has scaled back its sales outlook due to the economic downturn but still expects to post record sales for its current fiscal year, its top executive said on Tuesday.

IKEA Chief Executive Anders Dahlvig, due to step down on Sept. 1, said in an interview with Swedish daily Dagens Industri that the group's trend of rapid growth had been broken as the worst recession in living memory hit markets across the world. "(But) thanks to us having succeeded in swiftly cutting our costs we are spared the large losses that have hit other companies," he was quoted as saying by the newspaper.

"And it is of course positive to be able to post our best ever sales in the middle of the worst downturn in the modern era."

Boosted by the opening of new stores, the group currently sees sales rising 3 percent to 21.5 billion euros ($29.8 billion), excluding currency swings, in its fiscal year ending on Aug. 31, the newspaper said.

While the group, known the world over for low-price, self-assembly furniture and a minimalist Scandinavian style, continued to expand with new stores, it had also cut around 5,000 staff due to the weaker market demand.

"We have never had to make such large cutbacks before," Dahlvig was quoted as saying. "But it is absolutely necessary in order to adjust our costs and our capacity to demand which is much lower than we had expected."

"The force of the economic downturn has clearly surprised us. This downturn is very much linked to the housing sector and that makes things worse for our business."

Dahlvig was also quoted as saying the furniture giant was calling a temporary halt to expansion efforts in Russia due to bureaucratic obstacles in a market where it has invested $4 billion in new stores.