Wednesday August 27th, 2025 2:54PM
12:30PM ( 2 hours ago ) News Alert

Swedish retailer heads south for expansion

By The Associated Press
<p>Just weeks away from the much-anticipated grand opening of the giant blue and yellow Ikea store, highway workers put finishing touches on access roads and employees stocked shelves full of stylish furnishings.</p><p>The 310,000-square-foot store _ 60 percent bigger than the average Wal-Mart Supercenter _ opens Aug 3, and will have one floor of furniture, another of home accessories, a cafeteria featuring Swedish food, and 1,400 parking spaces.</p><p>The store, along with one that opened in June in Atlanta, represent a new push by the private Swedish retailer into the Southeast and Southwest.</p><p>"It's about time they got here," said Edward Fox, a marketing professor at Southern Methodist University who likes the kind of contemporary furniture sold at Ikea. He believes the chain can be a hit in shopping-crazed Dallas.</p><p>Ikea officials expect a big crowd when the doors open, similar to the debut in Atlanta. They estimate about 60,000 people in the Dallas area have shopped at one of their other stores.</p><p>Ikea landed in the United States about 20 years ago and has stuck mostly to the Northeast and West Coast, although it opened a small store in Houston in 1992. Its 2004 sales were about $15.4 billion, including $1.7 billion in the United States.</p><p>Company officials said they wanted to build second and third stores in successful U.S. markets before venturing into new territory. Now, however, Ikea is in an expansion mood. Over the next decade, the company plans to open five new stores a year in the United States, its second-biggest market behind Germany. The Frisco store is the company's 24th in the U.S.</p><p>Customers make unusually long drives to Ikea stores, which are usually located along busy highways in outer suburbs where there is land for plentiful parking.</p><p>The Frisco store, 25 miles from downtown Dallas, is in an upwardly mobile town of 34,000 residents that grew more than 400 percent from 1990 to 2000. Frisco has a much higher percentage of families with young children and lower percentage of seniors than Texas as a whole.</p><p>Ikea began looking at Frisco after the wildly successful opening in 2000 of a big regional shopping mall a couple hundred yards up state Highway 121.</p><p>"With the mall, we will get a lot more visitors than some of the other (Ikea) stores where people have to set out to go to Ikea," said Jim Tilley, who transferred from the San Francisco Bay Area to manage the new store, which will have about 500 employees.</p><p>Ikea is so big it faces different competitors in different categories _ Williams-Sonoma and Pottery Barn for accessories; Linens 'n Things and Bed, Bath & Beyond on soft goods; and furniture stores for sofas, chairs and beds. In Frisco, the new store is across the street from Ethan Allen and La-Z-Boy Furniture Galleries.</p><p>Jim Neal of retail consulting firm Kurt Salmon Associates said big furniture stores tend to dismiss Ikea, but at their peril.</p><p>"They're a threat to traditional home furniture retailers simply because they have strong sourcing and price points," he said.</p><p>Wendy Liebmann, president of WSL Strategic Retail, a New York marketing and retail consulting firm, said Ikea has filled a void left when many department stores stopped selling home furnishings.</p><p>"It's good, affordable design for the home under one roof. If you're able to put it together yourself, you save on labor costs," she said.</p><p>Ikea was one of the first retailers to offer consumers assemble-it-yourself furniture. Shoppers choose what they want, then go to a warehouse to pick up the item. Big items such as dining tables and futons come packed in nearly flat packages. Assembly wasn't always an easy task, however.</p><p>"People equated self-assembly with lower quality," said Fox, the SMU professor. "I think that's gone away as Ikea has developed almost a cult following."</p><p>Ikea is sometimes considered a store for young people furnishing their first apartment or home, but company officials say they sell to a much broader cross-section of shoppers, including affluent people moving into a bigger house or furnishing a second home.</p><p>For the first six months, the Frisco store will stock more than the usual amount of lower-priced accessories to attract new customers while gradually adding more furniture, Tilley said.</p><p>There will, however, will be no compromise to Texas home-furnishing tastes, which can run toward the gaudy side. Ikea managers typically adjust their inventory only after the store has been open for several months, and even then, the stock differs only slightly from one location to another.</p><p>"They don't make that many concessions for U.S. tastes," said Neal, the retail consultant. "They want to be that cool, reasonably priced but still a Swedish retailer, so they have all those funky Swedish brands and the Swedish meatballs."</p><p>___</p><p>On the Net:</p><p>HASH(0x1cdf0bc)</p>
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