Ikea is assembling a larger United States portfolio, set to land in the coming years after its largest-ever investment in the country.
The Swedish furniture giant is slated to grow by 17 stores on the back of a $2 billion investment from Ingka Holding BV, the largest owner and operator of Ikea stores, the Wall Street Journal reported.
The stores are expected to open over the next three years, adding to Ikea’s portfolio of 51 stores and two plan-and-order hubs — places where customers can plan layouts with consultants and then order the furniture — in the country. The expansion will be split between the two formats and many will be put in the U.S. South, where Ikea lacks exposure.
There are two other stores set to open this year in San Francisco and Arlington, Virginia. The forthcoming investment will also see the modernization of existing stores, increasing capacity for handling deliveries and spark the development of U.S.-specific products.
Tolga Öncü, head of retail at Ingka, said the company plans to initiate several phases of expansion over the coming decade in the United States, which has “endless opportunities to grow.” The investment is the biggest in a single country by Ingka, which recently had a growth spurt in Europe.
Inter Ikea Holding BV, the holding company responsible for the Ikea brand, reported an annual sales record last year, demonstrating the strength of the brand and continued consumer confidence. The company, however, also took a big hit from previous profit levels due to ballooning logistics and material costs.
Several prominent retailers are planning major expansions in the country. Discount retailer Five Below plans on adding 200 stores this year, bringing its portfolio above 1,500 locations. Dollar General and Dollar Tree were projected to add a combined 1,300 stores by the end of the previous fiscal year.
— Holden Walter-Warner
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