Late-blooming IKEA U.S. wears 20 well

DSN Retailing Today, Sept 6, 2004 by Mike Duff

The numbers come together at New Haven in a way that is somewhat similar to the way they do at Philadelphia. Opening in the 20th annum anniversary of the company's U.S. presence, the New Haven IKEA is the 20th unit in the United States--the 31st in North America--and the 200th worldwide. In fiscal 2003, IKEA posted $1.4 billion in U.S. sales and $1.9 billion in North America out of a global total of $12.2 billion.

Looking forward, the expansion of IKEA in the U.S. will familiarize even more consumers with its unique approach to furniture and home furnishings, generating additional sales and laying the groundwork for further growth. By filling in major metropolitan markets, IKEA will also become a destination for many more consumers rather than an expedition. Speirs-Lopez said that several IKEA locations, such as Schaumberg, reached their effective sales capacity very quickly after opening, although most new stores need three to five years to hit their stride. Folks from the south Chicagoland suburbs who wanted to shop IKEA, therefore, had to consider not only the long schlep to Shaumburg but a crowded store besides. A planned store in Bolingbrook, Ill., will shorten travel times and make shopping easier for those consumers, so the idea of going to IKEA to pick up some pillowcases and candles becomes a little less wild.

As it becomes more convenient to shop, IKEA will have a greater impact on the home furnishings business. Given its greater product and geographic ranges, IKEA is becoming a tougher competitor for mass-market broadliners and specialists who sell home goods.

Joan Storms, who covers U.S. home furnishings specialists, said the growth of such a well-regarded retailer must have an impact on the marketplace. "It's offering compelling prices, that's for sure, and its quality is okay and getting better. It's really getting competitive out there," Storms said.

1984

IKEA establishes U.S. operations

1985

Opens first U.S. store in Philadelphia

1990

Opens first stores in L.A. and NYC markets

1995

From mid-1992 to mid-1998, no new stores were opened in the U.S. market

1998

Opens first store in Chicago market

2002

Launches major growth initiative to have 50 U.S. stores by the end of 2010

20/20

IKEA U.S. celebrates 20th store (New Haven, July 2004) on 20th anniversary