Furniture company IKEA, which had withdrawn two stores in New York City, is now entering Manhattan's Fifth Avenue, known for its luxury brand stores.
Inka Investments, an investment subsidiary of Inka Group that operates IKEA stores, announced on the 1st (local time) that it has acquired one-third ownership of a building under construction on Manhattan's Fifth Avenue by Extell Development. The exact investment amount has not been disclosed, but it is estimated that the amount invested for this stake purchase is between $300 million and $500 million.
Accordingly, Inka Investments will become the preferred equity partner of the property and will own 7,430 square meters of retail space within the building. The company plans to open an IKEA store in this space, which can be described as a kind of customer meeting place.
An IKEA representative said, "Details are still fluid," but added, "One option is a traditional store format where customers can purchase and carry products themselves." Inka Investments also stated, "This perfectly aligns with our long-term strategy to bring IKEA closer to customers."
The size of the Fifth Avenue store is much smaller than the 6.5-acre store established in Red Hook, Brooklyn in 2008. Local media have noted that in recent years, IKEA has been experimenting with compact stores in urban areas that mainly sell items available for delivery. Previously, IKEA announced plans to invest $2.19 billion to open 17 new stores in the U.S. by 2026 in response to sales growth.
This is not IKEA's first time opening a store in New York City. It previously opened stores on Manhattan's Upper East Side and in Queens, but closed them due to high rent and fewer customers than expected. In particular, the store located in the Queens Lego Center shopping mall operated for only three years. Currently, only the Brooklyn store remains.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
