Ikea Eyes U.S. Sites To Anchor Mixed-Use Developments

Ikea's property division, Ingka Centres (formerly Ikea Centres), is planning to open six mixed-use developments in the United States, anchored by Ikea stores, over the next two years. 

The model isn't one the Swedish retailer has pursued in the U.S. before, preferring to open free-standing stores. But it has opened 43 centers — which it calls "Meeting Places" — in Europe, Russia and China. The company said it will have more than 70 such places by 2025.

Meeting Places all follow a similar pattern: an Ikea store, a home goods big-box and a mall featuring entertainment and other retailers, especially well-known international brands.

The company hasn't specified where the U.S. Meeting Places will be, though a representative told Chain Store Age that they would be in a "handful of the most high-profile cities."

The new U.S. locations will be different from most of the existing Meeting Places in that Ikea wants to put them in core urban markets. In other parts of the world, they tend to be outside city centers.

Locating in U.S. urban areas means the anchor stores would have to be smaller than standard Ikeas. The Ikea footprint for the new locations will be between 70K SF and 150K SF, compared to the usual 400K SF, Ingka Centres Managing Director Gerard Groener told Commercial Observer.

The company plans to acquire sites for the new U.S. locations and redevelop them itself. The site selection process is already underway, reportedly in New York and San Francisco, and Los Angeles and Chicago will also soon be visited by Ingka execs.

The move into Ikea-anchored centers isn't the only change the international retailer has taken to raise its game lately. For instance, Ikea is leasing distribution centers to facilitate delivery of online-ordered items and bulky products purchased in stores, as a way of competing with online retailers.

Also, Ikea has been investing in augmented and virtual reality apps to help consumers explore how furniture and other product items might look in their homes. The furniture retailer has hinted that within three to five years, its business model is likely to be a mix of brick-and-mortar and virtual reality apps.