
IKEA's shopping malls arm plans U.S. entry in major play - hhs
https://www.reuters.com/article/us-ikea-ingka-centres-exclusive/exclusive-ikeas-shopping-malls-arm-ingka-centres-plans-u-s-entry-in-major-play-idUSKBN22Q2MF
======
cs702
This is NOT about buying suburban malls.

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.

~~~
mark-r
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.

~~~
alistairSH
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).

~~~
clairity
> "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.

~~~
CBLT
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.

~~~
alistairSH
I see this in Reston VA.

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.

------
OzzyB
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.

~~~
jermaustin1
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.

~~~
cosmodisk
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.

~~~
pfranz
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.

~~~
logifail
> 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.

~~~
jermaustin1
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.

------
kleiba
OT: This must be one of the hardest headlines to parse for a non-native
speaker of English I have encountered on the front-page of HN.

~~~
orki
I still don't understand what does it mean.

~~~
Dobbs
The division of the "IKEA Corporate Family" that runs shopping malls is
planning on opening malls in the US.

------
jeffbee
Is the whole thing laid out in a giant 3-dimensional space-filling curve? Do
you have to walk through the Cinnabon to get to the Foot Locker?

~~~
TMWNN
[http://www.scp-wiki.net/scp-3008](http://www.scp-wiki.net/scp-3008)

~~~
hanniabu
Not sure what I'm looking at...

~~~
Doxin
A creative writing exercise. The whole site is in the same style and contains
some pretty amusing stuff.

------
hhs
If interested, this gives info on Ingka Centres:
[https://www.ingkacentres.com/en/what-we-
do](https://www.ingkacentres.com/en/what-we-do)

~~~
llsf
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...

~~~
hhs
Indeed, curious how this will work out in the long term.

How will they evolve? Doesn’t IKEA also sell food items? Wonder if they’ll
expand and go into groceries, and compete with Amazon/Whole Foods and Lidl?

~~~
kevindong
> 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.

------
jchallis
Always worth noting that IKEA is a nonprofit.
[https://www.racked.com/2014/9/16/7576651/ikea-non-profit-
com...](https://www.racked.com/2014/9/16/7576651/ikea-non-profit-company)

~~~
Matt3o12_
Can someone who understands tax law explain how this is legal and is
continuously being tolerated? This clearly goes against the spirit of the law.

~~~
progre
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.

~~~
seanmcdirmid
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.

------
padseeker
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.

~~~
JonathonW
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).

~~~
liotier
> Does IKEA do smaller-format stores anywhere?

In central Paris, there is one: [https://www.reuters.com/article/us-ikea-
france-store/ikea-op...](https://www.reuters.com/article/us-ikea-france-
store/ikea-opens-central-paris-store-to-cater-for-changing-tastes-
idUSKCN1SC0HL) \- I'm guessing it is slightly experimental.

Also, the Ikea In Vélizy (southwest suburb of Paris) only has kitchen &
bathroom. It is smaller than a standard Ikea but not city-center small.

------
pengstrom
Is the name "Ingka" simply a play on the name of the IKEA founder, INGvar
KAmprad, like IKEA itself?

~~~
baq
as are others.

bonus points if you figure out what owns what in the wide ikea conglomerate.

~~~
durnygbur
Enough said that their money own the tax, audit, and contol authorities in
dozens of countries around the world.

------
jsight
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.

------
tpmx
Interesting.

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.

------
DevKoala
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.

~~~
kube-system
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.

~~~
JoshTriplett
Agreed. There are a few (very few) cases where in-person still wins heavily;
clothing, for instance.

Are there any malls out there run as a co-op between the businesses within,
rather than as a separate business that leases space out?

~~~
bobthepanda
Maybe not a mall, but isn't a food hall a very limited interpretation of this?

------
fermienrico
I bet HN would react differently if we replace IKEA with Amazon - same concept
of huge "public" spaces governed by a massive corporation.

~~~
RobLach
Governed by IKEA and governed by Amazon are vastly different situations
despite their size and reach.

~~~
pkaye
What is the difference?

------
jseliger
IKEA seems like an underappreciated force for greater physical mobility:
[https://jakeseliger.com/2015/03/10/does-ikea-enable-
mobility...](https://jakeseliger.com/2015/03/10/does-ikea-enable-mobility/)

------
jldugger
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?

------
jdkee
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?

------
coronadisaster
The shopping mall where you can only go one direction in a maze... good for
physical distancing.

------
yters
ikea was founded by a nazi

