The message behind the news that Ikea has spent $213 million on a large retail space in downtown Manhattan should be hitting you over the head like a Billy bookcase: This is not your college kid’s Ikea.
Over the past five or so years, the giant home furnishings retailer—both its business and its stores are enormous—has been reinventing itself with urban locations, smaller formats, and a marketing approach targeting the rising generation of consumers.
This new location in the heart of SoHo is the latest manifestation of that transformation. Currently occupied by a Nike store, the six-story building at the corner of Broadway and Spring Street is slated to open under Ikea’s yellow-and-blue banner next year, and will feature about 25,000 square feet of retail space spread over the first two floors, plus a basement level for inventory and storage. The upper floors will be converted to office space.
The SoHo store is one of two Manhattan Ikea locations currently in the works. Last year, the retailer announced it will be debuting an 80,000-square-foot outpost in a skyscraper at 570 Fifth Avenue in midtown (between West 46th and 47th streets), scheduled to open after the tower’s construction is completed in 2028.
Ikea is spending $2.2 billion to grow in the U.S. market, money that will go toward new urban locations, expanding its online business, and building out its distribution network. Technically, the capital comes from Ingka Investments, part of the Ingka Group, which is a licensee of Ikea in the company’s somewhat convoluted organizational structure, but the intent is the same: Make Ikea more accessible to customers in major cities who can’t—or don’t want to—schlep out to the suburbs and deal with the gargantuan maze-like layouts of its signature stores, much less figure out a way to get their purchases home.
This, however, is not Ikea’s first New York rodeo. While it has a well-established traditional large-format location in Brooklyn’s Red Hook neighborhood, several other local iterations have crashed and burned. A “Planning Studio” on Third Avenue—a workspace catering to homeowners designing rooms for urban and small spaces—opened in 2019, but was shut down three years ago. A medium-sized outpost (100,000 square feet is Ikea’s definition of medium size) lasted less than two years in Rego Park, Queens, before closing in late 2022.
The two new locations are the brand’s latest attempt to find store sizes and formats that will work for city dwellers, and given Ikea’s perseverance, one has to think it will figure it out sooner or later. When it does, the furniture competitors that have been insulated from Ikea’s insanely low prices, equally insane assortments, and savvy marketing might are finally going to have to deal head-on with the ultimate furniture big-box store—one that sells pretty tasty meatballs too.
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Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.
