Ikea Opens NYC Store for Urbanites Who Won’t Assemble Furniture

(Bloomberg) -- There are no Swedish meatballs at Ikea’s first store in Manhattan.

Also absent from the quintessential Ikea experience are checkout counters, pallets of votive candles and the end-of-the-maze warehouse experience where shoppers load their purchases into their carts. In fact, there’s nothing to take home at all.

Welcome to the furniture giant’s latest realization that its business model -- one that’s grown revenue to nearly 39 billion euros ($44 billion) -- needs to adapt from its do-it-yourself ethos.

The closely held company famous for decorating everyone’s first apartment originally disrupted the global furniture market with its Scandinavian aesthetic, low prices and a huge selection in its 350,000-square-foot stores. But that model relies on shoppers being willing to play the role of both stock room clerk and furniture assembler themselves -- and that’s less appealing for many of today’s consumers, especially wealthier ones who are spending more on services.

“People are time-crunched and want more support in their buying process,” said Leontyne Green Sykes, chief operating officer for Ikea retail U.S.

So its first Manhattan store, which opens to the public Monday, doesn’t feel like your average Ikea. At about 17,000 square feet, the Upper East Side location is about one-twentieth the size of the company’s average location, and it feels more like a design firm than the closest traditional Ikea that’s 10 miles away in Red Hook, Brooklyn.

The company has dubbed this concept a planning studio and expects to open about 20 in the U.S., including in Los Angeles and Chicago, with each customized for the local market. This is the first time the concept comes to the U.S., after debuting in London last year. It’s part of Ikea’s wider reinvention around the globe, from a pop-up in central Madrid only selling bedroom furnishings to tiny in-mall shops intended to appeal to younger shoppers without cars in cities like Tokyo.

On the first floor of the Manhattan store, visitors learn about services such as booking a free consultation, furniture assembly and removal, and kitchen installation. In the basement, there are spaces for meeting with designers and computers for crafting a room on your own.

On the second floor, a mock-up of a 333-foot studio nods to the oddities of New York City apartments with a window treatment above a radiator and a lesson on how to dress up a bathtub that’s not in the bathroom. When shoppers are ready to buy, they can order from a sales rep’s tablet and set up a delivery time -- but they can’t take anything home with them that day.

The new kind of Ikea comes as the company battles surging competitors like Wayfair Inc., an e-commerce retailer that’s projected to see revenue jump by a third to $9 billion this year. With the growth in the population and wealth of cities, Ikea has also realized that its giant stores catering to the suburbs needed to be tweaked. That’s why the Manhattan store is not about filling a home with stuff, but designing a small apartment -- a shift it hopes will help it attract more clientele who are wealthy enough to own apartments.

“We’ll bring new people into Ikea,” said Green Sykes, who has been with the company for a dozen years. “They’ll get a chance to see Ikea in a new light.”

To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Jonathan Roeder

©2019 Bloomberg L.P.