It's about buying properties in 45 "inner-city" (high-density) geographical markets worldwide, not just in the US, and transforming those properties into mixed-use spaces.
"We plan to build mixed-use facilities that we call meeting places and that have a wide range of facilities and services," an Ingka representative explains in the OP, adding that "activities could range from healthcare and education to festivals and events, besides retail and food."
I view this as a minor but still welcome development for real estate in high-density areas.
But it also says they'll be extensions of existing Ikea stores. How many of those are in inner-city areas? The one in Minneapolis is in the suburb of Bloomington. It's also right across the street from the Mall of America, which will lead to an interesting competitive situation.
DC Metro has 2 Ikea stores. One in College Park (inner suburb on the MD side, just outside the Beltway). And one in Woodbridge (outer suburbs, a fair hike south in I-95 in VA).
I've never visited the MD location. The VA location is in strip-mall hell.
I have mixed feelings about mixed-use development. In theory, it's great - put shopping, dining, work, and homes in one place. Reduce driving, make walking/cycling possible, etc.
My problem is the way the US approaches mixed-use continues to be at a "larger than human" scale. It's not organic - it ends up being super-blocks developed in one go by a faceless developer. The common spaces tend not to be used - they look good in architecture drawings, but don't work well in meat-space. And parking lots are still built, which creates a Potemkin Village effect (multi-story garage surrounded in fake building facades, etc).
> "My problem is the way the US approaches mixed-use continues to be at a 'larger than human' scale."
as much as i love mixed-use, this is a fair criticism. because of escalating land values (and regulatory costs/uncertainties) in cities, everyone wants to hit a home-run and plays it safe as a result by building hulking superblock developments. there are ways to make those developments human-scale, but that costs more throughout the development cycle, and developers don't see enough return for it, since the effects are long-term, and their financial horizons are shorter-term.
The problem is that US zoning and finance has basically killed off the small upstart developer; think of the general concept of a house flipper, but instead of remodeling the interior they replace one home with two or three smaller homes on the same lot.
This still happens on a smaller scale in older urban areas, simply because price per square foot in places like New York make it hard to assemble a full city block unless you have half a billion on hand, and even if you did land parcels don't become available all at once like that.
This type of "missing middle" development still happens where I currently live in Seattle to a limited extent, but I would really like to see regulations limiting horizontal massing of individual buildings to prevent this problem.
I'm not sure that's the problem. I stayed in a mixed-use development in Southern California and the people who lived there straight up didn't visit any of the commercial space. I don't think mixed-use really works on a local scale without the crossover.
If the commercial space had even one store that people wanted, like a Trader Joes, it could have worked.
Real estate prices tend to be high. The mixed use development might have a few fancy restaurants, high-end boutiques, etc - but nothing to fill the daily needs of the residents. The local residents often have to drive to get to a normal grocer or mom & pop retail.
part of that, for LA at least, is that the mixed-use here still requires parking, which is expensive. so it's designed with low commercial square footage to make room for ground-level and above ground parking, which is cheaper than subterranean parking. the commercial space is minimized to a token amount likely to meet the necessary zoning/permitting restrictions to get the benefit of higher floor area ratios (FAR) for the least cost. then the businesses that can fit in the space, given the high rents, aren't nearly as attractive to residents, who are also paying high rents.
The apartment I rented in LA shared space with a Trader Joe, was across the street from Target and UCLA was a couple blocks away. Super expensive, however.
Well, I guess this goes back to the question of whether architecture can solve social problems.
Sometimes it works. But I am more a fan of humaneness solving social problems than technology. [1]
My other issue with the technology-solves-all mentality is that it leads to greater good type arguments. Countries with a passionate social scene seem to be that way because of what I guess we call culture. Great architecture and art, now that is something else...
[1] To be clear, COVID-19 is not a social problem. It does have social side-effects.
I guess this goes back to the question of whether architecture can solve social problems.
I'd say it can, but not in a vacuum.
Great architecture ..., now that is something else...
Agreed. Top-notch architecture is equal parts art and engineering. Not only is it functional (in the most basic sense of "it's a building with a roof and a door"), but it's aesthetically pleasingly, makes a statement about the state of the world, and makes occupants feel good.
I can't see them doing this in College Park with the goal of reducing driving. This Ikea is in the northern-most part. Unfortunately, retail is spread out thin along Route 1 and is absolutely awful for walking to if you are not near the university. And riding a bike on Route 1 is a significant risk on your life.
The College Park one might be an interesting option for them, as it's already in a pseudo-"mixed use" area. The location immediately borders an apartment complex and small shopping center. It's actually quite similar already to your fear, unfortunately.
One here in Bmore is in White Marsh/Nottingham MD. It's suburbia (there's an old yet active mall a few feet away & across the street a semi-old active yet more modern shopping plaza) and where tons pick up the MegaBus to travel to NYC.
The one in Atlanta is next to Atlantic Station which is a large business and residential development with rapid bus transit. It is also near Georgia Tech and Midtown though to get to Midtown you have to cross the highway which is not bike/ped friendly.
Yes. They don't go into a lot of detail, but I suspect they will look at all existing IKEA stores and selectively expand/convert some of them into mixed-use spaces. In particular, I can see them offering, say, 'satellite' office space and meeting rooms in certain suburbs near high-density areas -- for people that now want to work remotely but don't necessarily want to work from their own home every day.
I'm probably just missing it, but where do you see that in the article? From my reading of it these new "malls" in the US are going to be in dense areas, separate from regular Ikea stores.
I can imagine that there are multi-use spaces all fitted out with IKEA furniture that you can buy on the spot (but not haul out directly with you... rather, arrange same-day delivery from the suburban IKEA store nearest to that city).
I think this might actually work out because IKEA will essentially become the new $ANCHOR_STORE.
In previous times these anchor stores were businesses that got blown out by the Internet so there was no more anchor, and no more reason to visit the mall.
> Big Clothes Store - Go Online
> Big Book Store - Go Online
> Big Cinema Complex - Go Online
But furniture? People still wanna visit the showroom and check out the merchandise before dropping $thousands, and you might as well get a new pair of shoes and a sandwich too while you're there.
In short, don't change the Mall, change the Anchor.
I have noticed over the last 15 years or so, a lot of the anchor stores in suburban malls (Macy's, Dillard's, JCP, the now defunct Montgomery Ward's) attempting to become furniture stores on their upper levels, but their execution was awful. The furniture is typically stodgy looking, almost like what a grand parent would have in their home, but worse quality. Its like the furniture is an afterthought to the store, and I rarely see anyone actually purchasing anything.
Then when you go over to the UK, an visit a department store like a House of Fraser or John Lewis, their furniture has a much more contemporary look, and there are always people buying, talking to clerks about pieces, etc.
I do notice this with a lot of things in the US. It looks like it's either super expensive stuff that looks great anywhere and is usually targeting upper middle class/elite, or tacky, tasteless crap on the other side of the spectrum. There's almost nothing in between.
I feel like there's the Ikea (or Target/WalMart) furniture that's basically disposable, you can take it home in your small car, cheap, but will probably break if you move it or disassemble it. It's great in college or after when moving between multiple apartments. It's flat-pak, all the materials are thinner so the design follows that.
After settling down I wanted to invest more in furniture that wouldn't break or slide around. It definitely costs 3-5x more, looks better, but isn't great quality either. It's not flat-pak, cant be disassembled, wont fit in your car. I don't know if my calibration is off for what decent furniture should cost, or if everything started cheaping out years ago, but it seems like the worst of both worlds. The design is nice, but since it's wood veneer you can't really touch it up or repair it because the fiber board is showing through. I'm not sure where to find decent furniture. I feel like I'd have to pay through the nose for something bespoke.
Swedes (where IKEA is from) are famous for saying their IKEA furniture is just what they use until their kids are old enough not to wreck the good furniture they have in storage.
The trick is finding better than IKEA quality furniture. You might wind up paying more for something that is still IKEA quality.
It seems like the main way to find decent quality furniture at non-ridiculous prices is older stuff at thrift stores/flea markets/garage sales. Gets harder and harder to find every year though.
IKEA does carry a few items that are actually made of wood, though most of those are pine. Not great but a step up from particleboard.
Home Depot of all places sells some reasonably nice self-assembly hardwood furniture. Some of them are available pre-painted or stained but a lot of them you have to finish yourself.
> Ikea [..] furniture that's basically disposable [..] but will probably break if you move it or disassemble it
Of all the entry-level furniture we've purchased since starting a family, it's always been the stuff from Ikea that's survived being disassembled, moved, and reassembled in a new location. We've heard the same from various moving companies too.
I've bought a dining table, and desk off wayfair that do well with disassembly (after 3 moves now), but they are probably double Ikea prices. That said, I still have every one of the 10 Kallax shelves I've bought over the years. they transport extremely well, and are actually great small home depot moving box holders.
When we self moved last year, I double stacked my short kallax shelves along the front of the box truck, then load them up with moving boxes, then our tall ones in front of that, and load them up with boxes, then the rest of our furniture in front of that. It made the truck a lot more organized, and no boxes were crushed under something heavy.
I'm in Britain, so obviously not very well aware of what's available in the US, however how does something like this compare to what's available on your side of the pond:
www.oakfurnitureland.co.uk
[Edit]: turns out they do sell in the US as well.
Keep in mind that the 20% VAT in the UK is included in the British prices, while sales tax (where applicable) is not included in the JC Penney pricing.
re: Oak Furniture Land and VAT/Sales Tax/cheaper UK prices.
The furniture is likely manufactured in the EU, thus there import tariffs and shipping to the UK are much smaller than the cost to import and ship to the single US location, likely being the reason the same chest of drawers is almost double in price.
yeah, my perception is that there's a lot of companies trying to target the feeling of "outgrowing" your ikea furniture with their marketing, but aren't really selling anything better than ikea. it's just the same cheap crap, but with a different brand so you can say you didn't get it at ikea.
Ever-increasing income inequality means there’s really only two classes anymore: the rich, and everyone else. A bifurcated furniture market (tasteful, well-built stuff for the rich, disposable cardboard trash for everyone else) is just one natural consequence of that.
I understand the sentiment you are leaning towards, however cheap or inexpensive doesn't need to be tacky. It is laziness when it comes to product, interior design and etc.
That's it exactly. Looking through the website of Ingka group they are all malls with an IKEA as the anchor store. Which makes perfect sense for IKEA group... In a normal mall the anchor store gets the best lease deals, so may as well operate both and get the extra revenue from the other leases...
>, and you might as well get a new pair of shoes a
I spent tens of thousands decorating my new house with furniture bought online. I found the experience to be excellent and will probably never bother buying in person again.
As a native speaker, it's a terrible headline. It took several attempts and one coffee to parse it.
My wife, a Dane with a Masters in English Literature... "that's an appalling headline." The author has smashed in every keyword in an attempt to hook people from the beginning with the IKEA keyword.
Ideally it would be something like "Ingka Centres, IKEA's shopping mall arm, plans U.S. entry in major play"
I expected more from Reuters. The author is Swedish, and it's not even a sentence structure that makes sense in Scandinavia.
Maybe this is next level clickbaiting. I'm a native English speaker and I had to click on the article in the hope of understanding what the headline was supposed to be saying.
Normally I just go straight to the comments on HN for the useful content. And in this case, the better headline is already posted in the comments...
IKEA might be into something here. Inner city retail has been dying slowly, never really recovered from 2008 crisis.
There might be an opportunity here opening up. I would assume that commercial real estate is cheaper now (and might be even cheaper in few months with COVID-19), and there is still infrastructure (public transportation, even parking lots) and demand for meeting place (for shopping or entertainment) in city centers.
Curious to see how this is going to pan out...
> Doesn’t IKEA also sell food items? Wonder if they’ll expand and go into groceries
They do have a cafeteria and then a frozen/dried goods area in all of their stores that I've been to. Selling perishables (e.g. fresh veggies) is a whole 'nother beast from selling frozen/dried goods and would be effectively trying to enter into an entirely new market.
Yes! We do sell food items and I can tell you that all these new touch points for meeting the customer will have food ... we need to be where the people are, online and downtown.
unfortunately it seems to be 90% corporate buzzwords and jargen so I still have no idea what an Ingka Center is. I'm pretty sure they are a building with, things in it...
Controlled by a nonprofit, and taxed as a nonprofit, but IKEA is very much a for profit operation. The company structure is pretty complicated as stated in your link. Wikipedia has a nice overview: https://en.wikipedia.org/wiki/IKEA#Corporate_structure
Netherlands, Switzerland, and Lichtenstein - the usual suspects. Wasn't Netherlands among the countries against so called "Corona bonds"? Here it goes the EU solidarity...
EU seems more in solidarity over covid than the US, which has had armed terrorists occupying places of government, the national guard protecting against the federal government, and massive disparities in how it’s been treated across the country.
Only the poor pay taxes. I used to work for a company in Sweden owned by Nestlé. In our monthly all hands meetings our CFO would always present 2 sets of numbers, one where it showed our financials without licencing fees. This would show an about 5% margin, pretty healthy for a food manufacturer. This was shown to us so that we wouldn't be so depressed. Then it was the numbers with licencing fees. Theese would always show a margin of about 0.01 percent. We where taxed on the 0.01 percent. The rest would go to Nestlé where they would pay no tax at all because the canton in Swizerland where they where registered had no tax on licences.
IKEA’s founder did the same thing, moving from Sweden to Lausanne Switzerland to avoid tax. Switzerland has taxes, but they can be negotiated to flat values rather than rates on income.
That someone would need to understand tax law in the Netherlands and Lichtenstein. It's possible that in those jurisdictions, this type of corporate arrangement is very much within the spirit of the law. Hopefully a European expert chimes in.
A comment above states that IKEA is very much a for-profit operation. I don't quite understand that. Whether an organization is for-profit or non-profit, they are all businesses in the sense that the cash-in must match cash-out. Most American hospitals are non-profits, but look at the way they conduct operations. Some for-profits receive grants from foundations for doing work that would be considered charitable.
The only real difference between non-profits and for-profit corporations is that the former do not have shareholders. Both types of organizations can still issue monstrous bonuses to employees and offer performance-based compensation (commission for donations generated, etc). But it's only with a for-profit company that the owner(s) can sell the company, or pieces of it.
same as insurance companies (like Blue Cross Blue Shield), or asset managers (Vanguard) are nonprofits, yet still manage to make a nice profit for people involved.
When your income crosses certain threshold, it makes sense to spend hundreds of thousands on consultants for tax planning, optimizing, etc, usually staffed with former tax auditors and lawyers
Just because they run it as family foundation doesn't mean they are nonprofit, but yeah they basically dodge taxes by virtue of their complicated financial scheme.
Building an IKEA, even a mini IKEA, inside an existing mall in a major metropolitan city, i.e. Chicago, would be a massive success. I hate having to drive 20+ miles into the suburbs to get to an IKEA.
Chicagoans have to drive all the way out to Schaumburg or Bolingbrook and somehow take the furniture back with them. It’s a big hassle. I think what is usually regarded as a downside of IKEA, user assembly, will be an advantage in cities where it’s hard to arrange for the transportation of furniture.
In Chicago I think a place like State St. would be perfect for IKEA. It’s the “second” shopping boulevard (with the main one being Mag Mile) where rent is cheaper and the businesses attract more locals as opposed to tourists. It’s also centrally located in the Loop where it will be more equidistant to the various neighborhoods. They would be well advised to sell a greater selection of office furniture being so close to millions of square feet of office space.
It would be neat to have something downtown on State street. IKEA has stuff that isn't as big as say furniture, and could be hauled on the CTA.
However my thoughts were more along the lines of the very near suburbs, where there's a fair amount of vacant properties.
I don't know how well things are going at the Lincolnwood mall, on Touhy and McCormick Ave, just on the border of the city. Carson's just closed, and the Room Place furniture store has moved in. There are a handful of underperforming malls on the outskirts of the city, and it would putting an IKEA would definitely drive of traffic and make it more attractive.
Millennials value convenience a lot. I think they would consume more IKEA, and more furniture/decor in general, if there was an IKEA downtown. IKEA would really have to narrow down its SKUs for that to work though. Alternatively, they can take the approach you suggested (near suburb) but also use that IKEA as a warehouse-like hub for cheaper and faster deliveries to Chicago with a greater selection.
If you go to the store instead of the website, you can arrange delivery of anything. I think it's cheaper than the website delivery as well. You still need to gather your purchases, whether that's picking from the first-floor warehouse or waiting for the fetching from the closed stock part of the warehouse and then move it to another part of the store for delivery.
Does IKEA do smaller-format stores anywhere? Even the "small" (relatively) IKEA in Memphis, TN is still a 270,000 square foot space-- close to double the footprint of the Costco next door, and two stories in a good chunk of the building.
It seems to me like it would be hard to scale an IKEA down-- the showroom side needs to be large because assembled furniture is large, and the warehouse side also needs to be large to stock everything (unless IKEA changes up their business model to do everything by delivery, but then they've lost their big distinction from all the other furniture stores around).
Not necessarily. Ikea furniture has the principal advantage of being sized for the spaces you'd commonly find in cities. Typical furniture from a US furniture store wouldn't fit in my apartment. My Ikea "bedroom set" consisted of under-bed storage and a bed frame with slats. And my couch had enough storage under it that I kept all my hiking equipment in my living room. It was fantastic.
There’s a small scale IKEA already in NYC. It’s situated uptown in a relatively high priced area and likely because of that, somehow the furniture and decor looks much nicer. I think it’s the same furniture but somehow through some well planed interior design it just looks nicer.
There used to be a small IKEA on the high street in central Uppsala (Sweden) in the late 1980s, and a larger one outside the city. The small shop went away around 1990, no idea why since it's a university town where everyone gets around on bicycles.
I've never understood why they don't do this. I have to assume that the majority of their sales go to Chicago apartment/condo dwellers rather than suburban homes.
I'm happy to see this. There is a lot of potential for new growth in this sector and woefully insufficient ongoing investment. It seems like a tremendous opportunity for them.
It's a bold gamble betting that central city shopping will make sense in a few years from now. I've got to applaud them. I'd hate to see these cities reduced to banking storefronts/tech worker office buildings.
They do have the financial sustainability to attempt this during a 10-15 year trial period or so (compare with the attempt to enter the russian market), even while suffering massive losses every year. Not being a listed company has its perks.
I am not confident on malls being a viable business on the coming years, but I am glad some corporations still believe in them since they generate tons of jobs.
I think they will continue to exist if they focus on their unique strengths that online cannot compete with. They'll never compete as a place to get a good price on a commodity widget. They'll become places for things where experience, sensation, or interaction are important.
It seems as though their model is to have malls with Ikeas attached. Some with really large Ikeas, others with smaller Ikea pick-up points or whatever.
Ikea generates a ton of foot traffic. Using that as the anchor will probably guarantee a lot of traffic to the other stores in the mall (when many malls are losing their long standing anchors).
Wow, there's a massive amount of dead retail in the US already. A few metros may have thriving retail but there certainly aren't 45 of them. But I guess IKEA might bring enough foot traffic to offset some of that?
Isn't the U.S. the most highly developed retail environment with in excess of xxxx square feet of retail per person at a much higher rate than the U.K. or other developed countries?
It's about buying properties in 45 "inner-city" (high-density) geographical markets worldwide, not just in the US, and transforming those properties into mixed-use spaces.
"We plan to build mixed-use facilities that we call meeting places and that have a wide range of facilities and services," an Ingka representative explains in the OP, adding that "activities could range from healthcare and education to festivals and events, besides retail and food."
I view this as a minor but still welcome development for real estate in high-density areas.