The Swedish furniture store IKEA is making its largest-ever investment in new U.S. locations as demand for its flat-pack furniture rises.
- IKEA announced Thursday that it plans to open 17 new U.S. locations over the next three years, spending around $2.19 billion.
- This new investment will also be used to improve the company’s current fulfillment network and delivery services, The Wall Street Journal reports.
- Head of retail at IKEA’s parent company Ingka Holding BV Tolga Öncü said this investment is the first step in a multi-phase expansion into the U.S.
- “The U.S. is one of our most important markets, and we see endless opportunities to grow there. More than ever before, we want to increase the density of our presence in the U.S.,” Öncü says.
Why it’s news
IKEA is among several other European retailers looking to expand in the U.S. amid uncertain economic growth in Europe. Zara and Lego are also looking to the U.S. for expansion.
IKEA products have been in particular demand in the U.S. over the last year. Supply-chain disruptions that upset sales during the pandemic have been resolved, improving profits. The company’s products are increasingly desirable as an affordable furniture option for Americans.
The furniture retailer’s new locations will include eight stores and nine “plan and order points.” The plan-and-order points are a more recent IKEA concept where customers can plan out a room layout with the help of IKEA employees. Customers then order the products and have them delivered to their homes.
So far in the U.S., IKEA has 51 stores and two plan-and-order points. Two additional locations are scheduled to open this summer in San Francisco and Arlington, Virginia. The new planned stores will likely make the U.S. IKEA’s largest market, The Wall Street Journal reports.
The new store locations will focus on the southern U.S., where IKEA has relatively little investment. The company expects the expansion will create 2,000 new jobs.
In addition to the new stores, Öncü says IKEA plans to modernize existing locations and improve the current product delivery systems.