Amazon, Target, and Trader Joe’s have all cemented their Manhattan presence in recent years, and it looks like Ikea does not want to be left out of the action. In a Wall Street Journalstory today that discusses the Swedish furniture company’s larger restructuring plans (which includes slashing 7,500 jobs in an attempt to focus on delivery and digital efforts), it was revealed that Ikea will open 30 new stores in city centers over the next two years. There is currently a store in central London, and the next foray into major urban hubs will be its largest yet, a 5,000-square-foot space in Paris. After that, they’ll open a city-center store in NYC, which we assume will be somewhere between FiDi and the 80s.
The jobs that Ikea is getting rid of are mainly in the communications, human resources, and administrative departments. But by investing in delivery, digital, and city-center stores, the furniture giant plans to create 11,500 new jobs over the next two years, a very steep increase considering they currently employ 160,000 corporate staff. The shift comes after internal research revealed that 80 percent of Ikea customers research and plan their purchases before even entering a store. In response, as the Journal explains, “IKEA is cutting the number of products it displays, freeing up space for more mocked-up living rooms and bedrooms.”
Since opening its first store in the Swedish village of Älmhult in 1958, Ikea has focused on opening sprawling locations in more rural or industrial areas outside of city centers. However, with statistics showing that 70 percent of the world’s population will live in cities by 2050, they’ve decided to adjust this strategy. Assuming that New Yorkers take to this idea, Ikea then plans to open similar city-center stores in Washington, D.C., Los Angeles, and San Francisco.
Ikea’s property division, Ingka Centres, is also taking a new city-center approach. Commercial Observer recently reported that the development arm will open six mixed-use developments in the next two years as part of a $6.6 billion investment plan. In addition to a proper Ikea store, these complexes will have retail and entertainment areas, commercial space, and health education services. The first of these locations is being built for $1.1 billion in Shanghai, China. For North American ventures, New York City and San Francisco are at the top of the list, though it’s not clear whether these much larger projects would be directly in Manhattan.
After teasing us last week with news that they were in the “preliminary” planning stages of opening a city-center store in New York City, Ikea has today announced, that they will, in fact, open their first Manhattan store in spring 2019. The IKEA Planning Studio–a store concept that focuses on “smart solutions for urban living and small spaces”–will open at 999 Third Avenue, right across the street from Bloomingdales at 59th Street and just over the Queensboro Bridge from Long Island City where Amazon is readying to bring 25,000 employees.
The location makes perfect sense. With the two-year-old Second Avenue Subway, more people are crossing through the East 59th Street corridor, and as previously mentioned, the quick cab ride to Long Island City makes it a hop, skip, and jump away from all the new Amazon fanfare. Plus, this area of the Upper East Side has long been Manhattan’s design district, with the D&D Building on the block south. The retail space at 999 Third Avenue became vacant this time last year, leaving a three-floor, 20,000-square-foot space empty. Owner the Zucker Organization has been marketing it as several different spaces as opposed to one large one, but it’s not clear how much of the storefront Ikea will occupy.
Ikea says the “Planning Studio concept was co-created with New Yorkers who provided input to IKEA throughout the planning process” and that it will “give customers the opportunity to discover, select and order IKEA products for delivery to their home, which is what urban residents want and need.”
This will be Ikea’s first city-center store in the entire country. They have already opened a Panning Studio in central London, and plans are already underway for their largest-yet, a 5,000-square-foot location in Paris. These stores are part of a larger restructuring plan, which includes slashing 7,500 jobs in an attempt to focus on delivery and digital efforts through efforts such as “new lower-priced shipping and delivery, Click & Collect, financing, and TaskRabbit assembly services.” Over the next two years, they will open 30 new stores in city centers; other U.S. cities being considered are Washington, D.C., Los Angeles, and San Francisco.
In a press release, Ikea says the Red Hook, Brooklyn store will also be remodeled and noted that they recently opened a new customer fulfillment center in Staten Island for online deliveries.